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Covid-19 Effects on Canadian Households Debt in 2023

2022 already ended, have you reflected yet on how you fared financially throughout the year? Has it been better or worse than 2021? Last year ended with insolvency filings, unemployment, and unprecedented government support programs. Millions of dollars were deferred, yet millions of dollars remain outstanding. To make sense of it all, let us look back to 2021 and see what it would mean for indebted Canadians this year-end.

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Helped with $ 27,000 $ 41,500 $ 35,000 $ 17,000 $ 23,500 $ 46,340 $ 21,000 $ 35,000 $ 26,700 $ 65,500 $ 57,400 $ 17,500 $ 75,500 $ 63,000 $ 35,000 $ 18,500 $ 55,000 $ 85,500 $ 43,000 $ 29,500 $ 27,800 $ 41,200 $ 35,800 $ 85,000 in debt

1 day 3 days 3 days 8 days 7 days 6 days 12 days 9 days 3 days 6 days 1 day 4 days 2 days 1 day 7 days 5 days 8 days 6 days 12 days 16 days 5 days 8 days 2 days 7 days ago in debt in

Orillia Huntsville Peterborough Toronto Brampton Kitchener Mississauga Hamilton Belleville Kingston Cornwall Oshawa Ajax St. Catharines London Sarnia Windsor Sault Ste. Marie Elliot Lake Sudbury North Bay Timmins Thunder Bay Ottawa

Covid-19 Effects

Before Lockdown

Canada was already facing a steady growth in insolvency, months before the lockdowns. Debt loans that have been rising over the years resulted in Canadians filing for insolvency. Going into the pandemic, Canadian’s debt-to-income ratio, considering the overall indebtedness, was 180.4%, with the growth of total household credit at an annual rate of 4.7%.

According to TransUnion, this shows that the average consumer owed almost $30,000 in non-mortgage debt alone. And although there was only a slight difference from the prior year, there was a rising record of Canadians carrying more debts. Apart from that, there was also a significant growth not only in mortgage loans but there was also a worrying rise in high-interest installment loans. The high cost of living and exhaustion from trying to keep ends meet resulted in delinquencies and insolvencies, even before the Pandemic, leading thousands of Canadians almost to the breaking point. In the first quarter of 2021, non-mortgage delinquencies rose to 7.21% compared to the year before. In fact, insolvencies had been increasing across Canada and Ontario for 17 straight months before the pandemic hit.

Cataclysmic Shutdown

Canadian economists predicted the possibility of a recession, but a global economic shutdown was not in the picture. Almost overnight, Canada and the rest of the world had to adapt to a new normal. In just two months massive layoffs were at  13.7%, which is a new high in the unemployment rate. And because of the Pandemic, almost 40% of Canada’s workforce was working from home by the end of the first quarter of 2021, causing non-essential businesses to close. Personal savings rose to 28.2%, however, no improvement was reflected in the financial health of most Canadians. Covid-19 has impacted 63% of Canadian households in the first few weeks of the shutdown and people were worried about paying their mounting bills.

Canadian Households

Government Aid Programs

To help alleviate the impact of Covid-19 on Canadian households, the government stepped in and created programs such as the Canada Emergency Response Benefit (CERB). This program was to aid eligible Canadians with $2,000 every four weeks between March 15th and October 3rd. A total of $81.6 billion in income payments was extended to 9 million Canadians by the end of the program. 

Another program targeting employees was also implemented. The Canada Emergency Wage Subsidy (CEWS) was created to initially subsidize up to 75% of employee remuneration, which was reduced to 65% later on, helping a total of 6 million employees by December 12, 2021. So despite the continuous unemployment all over Canada, there was a growth in household income of 11% in the second quarter of 2021.  Statistically, Canada as a whole was not doing well, but this is because while some Canadians were doing better because of these programs, others were still struggling.

Income Squeeze

Although the lower-income group experienced a significant drop in employment, they benefited from the CERB program the most because the aid CERB has extended probably exceeded their incomes before the pandemic. For middle-income earners, however, the CERB barely made a dent in their situation making them more susceptible to using debt to make ends meet. That is why most insolvencies are expected to come from middle-income earners.


Banks and lending institutions also stepped in by offering debt payment deferrals and more than 3 million Canadian households benefited from this. Mortgages, credit cards, installment loans, auto loans, credit lines, and trade accounts were deferred, thus, a short-term let-off from debt repayment was afforded to millions of Canadians. However, this is only temporary relief, the repayment dues will pile up eventually, interests will be incurred after the deferral period resulting in higher debt balances.


While the problem of debt was still huge for borrowers, there was significantly less pressure to settle them. During this recession, everything was closed and consequently, debt collections were minimal.

Many callers experience reduced income due to this recession. Our advice to them is to spend their earnings on immediate needs such as food, shelter, and utilities. This would help in controlling their expenditures to prepare to deal with debt once the economy re-opens 100%. Bankruptcy or consumer proposals should only be filed by those with a steady income or income security. 

Both Ontario and Canada have witnessed a decline in consumer insolvencies not seen in 20 years. With the pandemic in full blast for more than half a year, filings across Canada are 38.4% lower than that of the previous year and are 33.2% lower in Ontario.

Households Debt

2022 Financial Challenges

The increased personal savings due to the closure of non-essential businesses along with the government grant programs was instrumental to the significant drop in the debt to income ratio by 162.8% in the 2nd quarter of 2021. However, the ratio rebounded by the 3rd quarter at 170.7%. According to Statistics Canada, household debts that are used mainly to fund consumables have been increasing steadily since May 2021. From $793.5 Billion by October 2021, it has reached $802.2 billion in February 2022.

Here are the challenges Canadians faced in 2022:

  • Government support ended.
  • Deferrals are ending as well, debts are piled up and delinquency rates rose.
  • The economy has yet to recover, maybe not until 2023.
  • Even after Canadians return to work, their wages are likely to be garnished.
  • Unpaid mortgages put homeowners at risk of losing their properties.

And although CERB provided temporary relief, due to its fast roll-out, Canadians who were granted but were later found out ineligible are required to repay the grant. And since CERB was a pre-tax income, Canadians will find themselves with unwanted tax bills on the next tax season.

2021 was catastrophic. Covid-19 deeply impacted lives, financially or otherwise. And this was carried over to 2022 and Canadian’s foreseeable financial future is clouded with uncertainty.

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Jennifer Chenier
Jennifer Chenier
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I was lost ... single mom... off due to Covid for 3 months .. did what it took to pay bills and look after my kids... and left with nothing but a tonne of debt I could not keep up with 😢. And then ....I met Connie.. Connie gave me my life back. The entire experience was like talking to my mother. She was full of compassion and knowledge and took me under her wing for this entire process. She turned tears into smiles and hope . She reassured me.. and made me feel like it was Going to be ok. I can’t thank her and the team (Paul) enough for helping me through this . I highly recommend National Debt Services to anyone looking for help with their debt . Start living again ❤️. Thanks Connie Jen
Katherina Preston
Katherina Preston
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"So glad I finally had the courage to make the call" Suma was amazing.. she guided me through my options and got the answers to all my questions. By the end of our very first phone conversation I had hope again...finally...no more sleepless nights worrying my debt ....Thank you National Debt Relief Services
Chris V
Chris V
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I would just like to thank Suma for really making feel comfortable throughout this entire process. Everyone tells you to watch out for gimmicks, quick fixes, and everything else that comes with Debt. Ive had other companies who had made promises and under delivered. However Suma and her team are quick to provide the right answers and guide everyone in a way towards better credit. She has made it seamless with great communication and availability. I have personally referred her to several of my closest friends and i would recommend her to anyone else looking for consolidation.

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To know more what you can benefit from our Ontario Debt Relief Program, simply try our Debt Consolidation Calculator below and one of our debt specialists will get in touch with you and provide you the best debt relief option that fits your situation.

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We will help you reduce as much as 75% of your debts and consolidate it into a single affordable monthly payment. Your creditors will stop harassing you and all interest will freeze if you get into our Ontario Government Debt Relief Program.

Many Ontarians are already benefiting from our Debt Relief Program, YOU should too!

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Frequently Asked Questions

A Debt Consolidation is a negotiated debt settlement offer made between you and your creditors with the help of a Debt Relief Agency in Ontario. Some key benefits of Debt Consolidation are interest-free program, no upfront fee required, combined monthly payment into one affordable amount, no lawsuits, and many more.

Yes, your assets are safe from creditors. A licensed debt relief agency in Ontario will help you come up with an offer to your creditors that will make sure your assets will be out of the paper.

No, in fact, this is one of the great advantages of a Debt Consolidation Program. All wage garnishment will stop from the day you filed the proposal.

The effect on your credit score is not going to be severe. Your credit score will most probably go to R7 Rating and will remain in your credit report for another 3 years after you completed the program. This means that it will not be permanent and you will still be able to rebuild your credit score.


This varies depending on the proposal you will be discussing with the help of a certified debt relief agency. It is also worth noting that debt consolidation cannot exceed more than 5 years.

If a debt is shared, you need to file a joint debt consolidation offer to your creditors. However, in most cases, in which the debts are individually incurred will have no impact on your spouse.

After three missed payments, your debt arrangement with creditors will be broken and you will end up getting chased again for the original debt amount plus interest.

A debt consolidation offer can be paid off earlier if you can. In this way, you receive your “Certificate of Completion” sooner and you can immediately start rebuilding your credit score. 

National Debt Relief Services Ontariois a certified Canadian Debt Relief Agency that offers FREE CONSULTATION to your debt consolidation needs. We value the trust given to us by our clients by making sure your personal information is confidential and private. Our personalized plans are designed to tailor fit your financial capacity. Our specialists will get in touch with you by simply answering a few questions thru the link provided below.

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Dawn Friesman
Dawn Friesman
I've been working with Allicia Macdonald shes very professional and sweet. I cant thank her enough for helping me rebuild my life. Thank you so much.
Chantal Rolfe
Chantal Rolfe
Today I had a wonderful experience with Rachael, she was Very professional I was very happy with what we talked about today she was very Caring I highly recommend national debt relief services hundred percent😃
Jennifer Magill
Jennifer Magill
Brittany was awesome, she explained everything clearly and offered solutions every step of the way. It’s always nice to hear that you could do this or that, I didn’t feel forced to do anything and was able to decide clearly. Thank you 🙏🏼
Dave Tonnos
Dave Tonnos
This company will work with you and through any difficulties that may arise. They actually hold themselves accountable, how refreshing during troubling economic times.
marian kamara
marian kamara
I have a great experience working with Suma, she work me through the program, takes her time to explain everything to me about how the program work, what I need to do from start to end of the process. I’m so thankful to God for sending an angel Suma to help relief my debt. It’s a great company to work with. I will recommend this program for anyone in debt like me.
Donna Hutchings
Donna Hutchings
Connie B. was absolutely awesome! She explained everything in detail to me. Very professional to work with and takes the time with you. She really has compassion. So glad she helped me out. Thank you
lynn collins
lynn collins
Joel has made this so simple and effortless he made sure i was well informed and making the right decisions for my situation i would recommend joel at national dept Relief to anyone in hardship with there bills thanks alot joel i really appreciate everything you have done for me thanks!! 5 stars for sure! and its chad ball not my mom lynn lol
Billy Bong
Billy Bong
I had a great experience with Brittany, so helpful and understanding. Never felt like I was being pressured or rushed into anything. She was always there with answers to my questions. Thanks for all the help and peace of mind you helped me achieve.
Amber-lyn Miller
Amber-lyn Miller
Let’s Just Put It Simple....... Not All Hero's Wear Caps........I spoke with Suma over a fairly lengthy period of time because of my busy schedule and lack of free time on my part, and she was not only extremely patient and understanding, but also beyond helpful And informative. Any question I had and no matter how many times she had to explain it to me she took her time to make sure I completely understood every single step and process before she moved on to the next thing. I have been so stressed out and worked up about my debt and trying to figure out how to fix it all since I know I will not be returning to work at all in the future because of medical issues and being 26 with that realization makes things just that more stressful but Suma made everything so easy and my payments are $100 a month for less then 5 years with no interest or penalties for early pay off. I’m so glad that I didn’t settle with some other place that was asking for $350 + a month for 7-12 years and paying off early would cost you more.
Jessica Preston
Jessica Preston
Caroline F. was phenomenal, she was so helpful, understanding and compassionate. Caroline did not make me feel bad for my mistakes, she was supportive and caring, she helped me through this dark time in my life I'm so incredibly happy I crossed paths with her. Thank you Caroline for being so wonderful to me! <3

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