Average Debt in Canada

The average debt in Canada is a topic that concerns many Canadians.

average debt canada

With rising costs of living and sometimes stagnant incomes, it can be challenging to keep up with payments.

However, there are solutions to this problem, and understanding the different types of debt can help.

The Current State of Canadian Debt

What is the current state of debt in Canada? Canadians are experiencing high levels of debt due to increased spending post-pandemic, soaring inflation, and increased cost of living. Canadians carry $1.83 in debt for every dollar they have, and almost 75% of Canadians live with debt.

  • More than 30% experience negative effects on their daily life due to debt-related financial stress, causing anxiety, depression, and other health problems
  • Debt is sometimes inevitable, and small business owners may acquire large amounts of debt for essential business investments
  • The average person is $21,183 in debt, excluding mortgages
  • Approximately 67% of Canadian families carry some form of debt, while around 30.2% are debt-free
  • Experts advise a DTI of 36% or less is ideal for most households

More statistics here: Average Income in Canada

Statistics About Canadian Debt

What are some important statistics regarding debt in Canada? Here are some key data points:

  • Mortgages and home equity lines of credit are considered good debts, while credit card debt and car loans are considered bad debts
  • Good debt can build equity and bring the potential for rental income, such as a mortgage or student loan
  • Bad debt has no secured asset and doesn’t bring any ROI, such as credit cards or personal loans
  • The overall consumer debt in Canada reached $2.32 trillion in 2022, with an average individual debt of $21,183, an 8.2% increase compared to 2021
  • The average student loan debt in Canada is $26,075, and the average mortgage debt in Q3 2022 was $363,654
  • The snowball method advises paying off small loans first, while the avalanche method focuses on paying high-interest loans first
  • Consulting a financial advisor or credit counselor can provide valuable insight into debt
  • Cut expenses, sell unwanted items, and track spending with tools like Mint or YNAB to become debt-free
  • Find a financial advisor now and get 12 smart questions to ask in Advisorsavvy community newsletter

3. Understanding Good vs. Bad Debt in Canada

Debt is an integral part of Canadian households, and it is essential to understand the difference between good and bad debt to distinguish between beneficial and harmful debt practices.

  1. Good debt refers to borrowing for an investment that has the potential to generate income or appreciate over time, such as a mortgage, student loan, or business loan. Good debt can also provide tax benefits and help you build equity over time. Factors that determine whether debt is good include:
    • The ability to build assets or increased income potential
    • Potential to receive tax deductions
    • Secured by an asset or collateral
    • Historically low-interest rates
    • Loan used to finance something that appreciates over time
  2. Bad debt refers to borrowing for discretionary spending or non-income generating activities, such as credit card debt, personal loans, or car loans. This type of debt has no secured asset, doesn’t provide any ROI, and negatively affects your credit-worthiness. Factors that make debt bad include:
    • High-interest rates
    • No secured asset or collateral
    • No increase in income potential
    • No tax deductions
    • Used for consumable goods or services

4. The Average Consumer Debt in Canada

Canadians are facing an average debt crisis due to increased spending, pandemic restrictions, rising inflation, and other economic factors that have resulted in the average person accumulating $21,183 in debt, excluding mortgages. The debt burden is even higher for some age groups and demographics.

  1. According to the Manulife Bank of Canada Debt Survey, the average non-mortgage consumer debt in Canada includes:
    • Credit card debt – $3,482
    • Line of credit – $11,957
    • Personal loans – $8,442
    • Car loans – $20,747
    • Other – $12,497
  2. As per the Bank of Canada, the overall consumer debt in Canada reached $2.32 trillion in 2022, with an average individual debt of $21,183, indicating an 8.2% increase compared to 2021.
  3. Mortgage debt is the largest portion of overall debt in Canada. As per the Canadian Mortgage and Housing Corporation, the average mortgage debt in Q3 2022 was $363,654.
  4. The average student loan debt in Canada is $26,075.
  5. Approximately 67% of Canadian families carry some form of debt, while around 30.2% are debt-free.

5. Average Student Loan Debt in Canada

  • The average student loan debt in Canada is $26,075
  • 49% of Canadian students graduated with student loans in 2019
  • New graduates face significant challenges in paying off their student loans due to the high cost of living and increased competition for jobs
  • The Canada Student Loans Program (CSLP) offers financial assistance to students in the form of loans, grants, and repayment assistance programs
  • Repayment assistance programs are available for students who are having difficulty repaying their loans
  • Registered education savings plans (RESPs) can help parents save for their children’s education and provide opportunities to receive government grants for education
  • Choosing the right repayment plan and making timely payments can help reduce the overall cost of the loan
  • Students who graduate from programs with marketable knowledge, such as health care or business, tend to have better chances of paying off their student loans

6. Average Credit Card Debt in Canada

  • The average Canadian household carries $3,924 in credit card debt
  • Average monthly credit card spend in Canada was $2,447 in Q3 2022, an increase of 17.3% compared to the same period in 2021 and 21.8% compared to 2019
  • Credit card debt can have a significant impact on a person’s overall financial health, as it comes with high interest rates, affecting credit utilization percentages and credit-worthiness
  • Carrying a balance on a credit card can incur more debt than initially expected due to compounding interest rates
  • Strategies for reducing credit card debt include negotiating lower interest rates and terms, consolidating debt with a personal loan or balance transfer, and cutting unnecessary expenses
  • The 50/30/20 rule is a budgeting strategy that can help manage debt by dividing income into essentials, wants, and savings/debt elimination categories
  • Analysis of credit card spending and tracking expenses with tools such as Mint or YNAB can help people get back on track with their finances
  • Seeking the advice of a financial advisor or credit counselor can provide insight and guidance on reducing and managing credit card debt
  • Creditors may sell unsecured debt to collection agencies for a fraction of the amount owed, affecting credit scores and leading to legal action
  • Canadians struggling with debt can reach out to non-profit credit counseling agencies for assistance in finding solutions.

7. Average Mortgage Debt in Canada

  • The average mortgage debt in Canada was $363,654 in Q3 2022.
  • Mortgage debt is considered good debt as it builds equity and has potential for rental income.
  • Canadians can access different mortgage options such as fixed-rate or variable-rate, depending on their preferences and credit-worthiness.
  • As of November 2021, the Bank of Canada kept its key interest rate at 0.25%, impacting mortgage rates and accessibility to loans.
  • The real estate market in Canada can fluctuate, with property prices varying by province and region, so it’s important to do research and assess affordability before committing to a mortgage.
  • As with any debt, it’s essential to make regular payments, stay within budget, and consult professionals like financial advisors or credit counselors when necessary.

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8. Tips to Pay Off Debt Quickly in Canada

  • It’s recommended to aim for a DTI of 36% or less by dividing monthly debt payments by gross monthly income.
  • The 50/30/20 rule is another method of budgeting where 50% of income is used for vital needs, 30% for wants, and 20% for savings and debt repayment.
  • Snowball and avalanche methods are various ways to pay off debt, with the former focusing on paying off small loans first and latter on high-interest loans.
  • Budgeting tools like Mint or You Need a Budget (YNAB) can help track expenses and identify areas for cutbacks.
  • Online discount brokerages and exchange-traded funds (ETFs) can provide investment options and help increase returns on investment.
  • Consolidating debt is a useful method of combining multiple debts and reducing overall interest rates, ultimately leading to quicker repayment.
  • Seeking help from professionals like financial advisors or credit counselors can provide valuable insight and support in creating a debt repayment plan.
  • Negotiating interest rates or terms and switching to lower interest cards can reduce debt and increase financial stability.
  • Selling unwanted items and reducing additional expenses like clothing or entertainment can supplement debt repayment.
  • Regular contributions to an emergency fund and taking advantage of tax returns or bonuses can help pay off debt quickly.


  1. https://www.cbc.ca/news/business/bank-of-canada-fsr-1.6847611
  2. https://saudigazette.com.sa/article/632758
  3. https://globalnews.ca/video/9721828/canada-now-has-highest-household-debt-in-g7-cmhc
  4. https://www.thestar.com/business/2023/05/23/canadian-debt-warning-signs-our-households-have-the-worst-debt-ratio-of-any-g7-country.html