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While the Bank of Canada opted to hold its key policy interest rate steady this week, new data suggests young Canadians are feeling anything but stable.
According to figures released Tuesday by the Credit Counselling Society (CCS), Canadians aged 18 to 34 are shouldering growing debt loads and increasingly turning to high-cost lenders just to cover essential expenses, despite interest rates remaining unchanged.
“A steady interest rate doesn’t undo years of financial strain,” said Peta Wales, President and CEO of CCS. “Many young Canadians are already deep in debt. They're borrowing small amounts just to cover essentials, and over time, those borrowing decisions stack up.”
The society reports that the number of clients under 35 reaching out for help has grown by more than seven per cent since 2023. This age group now accounts for more than a quarter of all CCS clients. Most of them are renters, and while many work full-time, a significant portion are in part-time, contract or gig roles—leaving them vulnerable to financial instability.
Cities like Edmonton, Vancouver, and Calgary, where housing remains especially costly, have seen the highest numbers of younger clients seeking assistance.
Debt by the digits
The average non-mortgage debt held by Canadians under 35 rose to more than $24,000 this year, a nine per cent jump since 2023. But it’s not just the size of the debt that’s concerning, CCS says; it’s how young people are borrowing.
More than 40 per cent of younger clients now owe money to finance companies or through buy-now-pay-later plans, and over 35 per cent owe payday lenders. These types of credit often carry high interest rates and complex repayment structures.
“We're seeing younger clients use credit for everything from groceries to textbooks to cosmetics,” said Mason Cox, CCS’s Director of Counselling. “It’s not just one big credit card bill anymore. It’s a patchwork of smaller debts that add up.”
A digital trap
CCS warns that digital lending platforms and in-app credit tools are contributing to the problem. For many young adults, instant borrowing through BNPL apps or online payday loans can feel seamless, but also hides the long-term risk.
More than 80 per cent of CCS’s younger clients are in a monthly budget deficit, meaning their spending outpaces their income even before debt repayments.
“Using apps to split payments or relying on payday lenders has become so normal, it doesn’t feel like risky debt,” said Wales. “But these patterns are often unsustainable.”
A growing call for early support
CCS urges young Canadians to seek help before their finances spiral into crisis. Many clients, they note, wait until they’re behind on multiple bills, unaware that guidance and tools are available long before that point.
“For many, quick credit feels like the easiest solution,” said Isaiah Chan, Vice President of Programs and Services at CCS. “But every option comes with trade-offs, and without the right guidance, it’s easy to get in over your head.”
The Credit Counselling Society offers free, confidential counselling online or by phone. More information is available at nomoredebts.org or by calling 1-888-527-8999.
About the Credit Counselling Society
The Credit Counselling Society is a non-profit organization dedicated to helping Canadians manage money and debt through education, budgeting support, and repayment solutions.