Debt is a fact of life for many Canadians. Between mortgages, car loans, credit cards and lines of credit, it’s rare to find someone completely debt-free. But how much debt is “normal,” and how do you compare to the average Canadian household? More importantly, when does normal debt become too much—and start putting your financial well-being at risk?
The Big Picture: Canadian Household Debt in 2025
Across the country, Canadians owed about $3.07 trillion in total credit-market debt as of early 2025. That includes everything from mortgages and car loans to credit cards and personal lines of credit.
When you look internationally, Canadians stand out. Among G7 nations, Canada ranks at the top for household debt. In mid-2025, the average household debt-to-income ratio was about 178%, compared to a G7 average of roughly 125%.
In other words, for every dollar Canadians earn in after-tax income, they owe about $1.78. That means many households are operating with very little financial cushion, carrying more debt than their peers in other advanced economies.
What “Normal” Looks Like
Debt levels vary widely depending on your age, income, family size, and where you live.
According to Equifax, the average non-mortgage debt per consumer in Canada was $22,147 in the second quarter of 2025. Those between 26 and 65 carry the heaviest debt loads — between $27,000 and $34,000 on average — while younger adults (18–25) carry about $8,000, and seniors over 65 carry roughly $14,000.
Regionally, Atlantic Canadians are close to the national average.
- New Brunswick and Nova Scotia: about $21,000 in non-mortgage debt
- Prince Edward Island: around $23,000
- Newfoundland and Labrador: about $24,000 (among the highest in the country)
These numbers help set a benchmark, but “normal” covers a wide range. A younger household may owe less, while a family juggling a mortgage, childcare and rising living costs may owe much more. What really matters isn’t just how much debt you have — it’s whether you can comfortably manage it.
Is “Normal” the Same as “Healthy”?
Not necessarily. Carrying debt is common, but how you manage it matters far more than how much you owe.
For instance, a well-structured mortgage that fits your income and budget is very different from a maxed-out credit card with no plan for repayment. Your financial health depends not only on the size of your debt but also on your ability to adapt when life changes, like a job loss, divorce or interest rate hike.
Here are a few ways to gauge whether your debt is manageable:
- Debt-to-income ratio: The national average sits around 178%, but that doesn’t mean it’s safe. If too much of your income goes toward debt, you’re more vulnerable when costs rise or income drops.
- Type of debt: Mortgages tied to stable income are generally less risky than high-interest loans or credit cards. High-interest debt can trap you in a cycle that’s hard to escape if you’re only making minimum payments.
- Trends over time: If your debt keeps growing faster than your income or savings, even if it seems “normal,” it may be a warning sign that you’re overextended.
What Does “Too Much” Debt Look Like?
There’s no single number that defines “too much debt,” but there are red flags to watch for:
- You’re spending more than 40–45% of your income on debt payments.
- You’re only making minimum payments and can’t build up emergency savings.
- Your debt balance keeps increasing instead of shrinking.
- You’d struggle to keep up if interest rates rose or your income dropped.
When you reach this point, debt can start to affect not just your finances, but also your mental health, sleep and relationships.
How to Stay on the Right Side of “Normal”
Here are practical steps to help keep your debt under control and build financial resilience:
- Track your income and expenses. Know where your money goes each month. Awareness is the first step to change.
- Calculate your debt-to-income (DTI) ratio. Add up your monthly debt payments and divide that by your gross monthly income (before taxes and deductions). For example, if you earn $6,000 a month before tax and pay $1,800 towards debts, your DTI is 30%. Aim to keep it below 40% for a healthy balance.
- Pay down high-interest debt first. Credit cards and payday loans cost the most in the long run. Reducing them first saves money and reduces stress.
- Build a small emergency fund. Even $500–$1,000 can prevent you from relying on credit when surprise expenses come up.
- Pause before taking on new debt. Just because borrowing is common doesn’t mean it’s right for your situation. Make sure your income and budget can handle it.
- Seek help early. If your debt feels unmanageable, you don’t have to face it alone. A non-profit credit counsellor can help you make a plan, negotiate with creditors and start rebuilding financial confidence.
Final Thoughts
Debt may be part of modern life, but that doesn’t mean living with constant financial stress has to be. While the “average” Canadian owes more than $1.70 for every dollar of disposable income, normal doesn’t always mean healthy.
If your debt is growing faster than your income or you’re constantly worrying about how to keep up, it’s a sign to take action. Talking to a non-profit credit counsellor can help you understand your options, reduce your stress and get back on track — so you can feel confident about your finances again.
Reach out today for a free, no-obligation consultation to learn more about our credit counselling and debt management programs. You don’t have to face debt alone — we’re here to help.
