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Debunking Debt Stigma

More and more Canadians are carrying debt than ever before. According to a new report released by TransUnion, the total amount of consumer debt increased to $2.32 trillion in the first quarter of 2023. 

The number of Canadians using credit also increased to 30.6 million (up 2.9% from last year). Equifax’s latest consumer trends report says that the average Canadian has $21,218 of non-mortgage debt due to new lending and increased spending. 

The numbers don’t lie: Canadians are in a lot of debt. So why is there so much debt stigma? Especially when we consider the fact that Canada, as an entire country, is in debt? Let’s take a look at the factors that are increasing debt loads for Canadians. 

The factors leading to increasing debt for Canadians

Many Canadians are in debt for a variety of reasons – many of which are completely out of their control. Canadians have not had an easy few years between the lingering effects of the global COVID-19 pandemic and years of economic uncertainty. Here are the top factors impacting Canadians’ financial well-being, and why we should be throwing any negative debt stigma out the window:


In Canada, the cost of living is going up because of inflation. This means that things like housing, energy, and the services people need are becoming much more expensive. The cost of groceries and everyday items has made it harder for Canadians to manage their money and has forced many to turn to credit cards, lines of credit, or predatory loans just to make ends meet. 

COVID-19 pandemic

The COVID-19 pandemic brought about unprecedented challenges for Canadians – and impacted the financial lives of many. With job losses and reduced income, many Canadians were forced to rely on credit cards, loans, and CERB (the Canadian Emergency Response Benefit given out at the start of the pandemic). Some Canadians received the benefit without being eligible, and it was a shock for program recipients when they learned they had to pay the money back

Cost of housing

Millennials, in particular, are predisposed to debt for lots of reasons – but the cost of housing in Canada plays a huge role when it comes to debt loads. Because home prices have shot up, many young people rent for longer periods, making the rental market much more competitive. As a result, the cost of rent in Canada has increased substantially in 2023, now averaging over $2,000 a month

Student loans 

Post-secondary education is great, and getting an education may help you earn more in the future. However, the average tuition costs for the 2022-2023 academic year were $6,834 for undergraduates and $7,437 for graduate students –  that’s up by 2.6% and 1.7%! Also, between one-third to one-quarter of students have loans from banks or family and friends, according to a 2020 Statistics Canada report. The report also found that lines of credit are more common among graduate students.

Consumer loans and lines of credit 

A 2022 Equifax report found that the non-mortgage average debt for 26 to 35-year-olds in Canada was $17,365 (up 3.62%) and $27,261 for 36 to 45-year-olds (up 4.7%). Unfortunately for young Canadians, debt seems to climb until middle age and then tapers after 65. Canadians are taking on more debt in the struggle to make ends meet. The number of loans that have payments due has also gone up across all age categories. 

As common as carrying debt may be in 2023, we understand how excessive debt can impact your well-being. If your debt is weighing on you too heavily or you’re having trouble meeting your financial obligations, contact us at Farber Debt Solutions to learn about your options. 

The difference between “good debt” and “bad debt”

While debt is simply a part of modern-day life, it’s still important to differentiate between “good debt” and “bad debt.” “Good debt” is debt that will benefit your financial future, like a student loan or a mortgage. “Bad debt” is debt that doesn’t provide any future value, such as new clothes you bought with a credit card. If you’re carrying too much “bad debt,” there are solutions that can help you manage. 

How we can help 

If you’re feeling overwhelmed by your debt and want a way to regain control, a Consumer Proposal can be a great choice. It’s an official agreement, approved by the Canadian Government that you make with the companies you owe money to. With a Consumer Proposal, you can reduce your debt by up to 80% of the amount you owe, based on what you can actually afford. The added benefit is that it stops any more interest and legal action from the companies you owe money to. 

The final word on debt stigma

No matter how you slice it, or how you feel about debt – it’s here to stay. That’s precisely why we think it’s time to end debt stigma and instead, bring in a new, fresh perspective on debt. While it’s essential to keep in mind the difference between “good debt” and “bad debt,” the fact is that it’s getting harder and harder to get ahead in life without taking on some debt. 

If you’re concerned about high-interest “bad debt,” contact us at Farber Debt Solutions today. We’re here to listen and give you the tools to help you feel confident and relieved that a solution for your debt is possible.