Canadian households are carrying record debt while two-thirds of adults are actively spending to cope with economic anxiety.
When household debt is spiralling, it might be prudent to curb spending. But when economic anxiety is high, spending may feel like relief.
Two new studies this week highlight the juxtaposition of Canadian households facing unprecedented debt levels, while needing something to make them feel good.
TransUnion Canada's Q2 2026 Credit Industry Insights Report found total outstanding balances grew by $116.7 billion (a 4.6 per cent year-over-year increase) driven largely by borrowers at the highest and lowest ends of the credit spectrum.
Meanwhile, a separate NerdWallet Canada survey conducted August 7–11, 2026 found that 66 per cent of Canadians engaged in "doomspending" (making discretionary purchases driven by financial anxiety or uncertainty about the future) in the past six months.
A divided borrowing landscape
TransUnion's data follows recent Equifax debt stats and reveals sharply divergent credit behaviour across risk tiers.
Super prime consumers drove the largest share of balance growth, with outstanding debt rising 6.5 per cent year-over-year to $1.74 trillion. Subprime borrowers, by contrast, modestly reduced their average balances by 0.2 per cent, pointing to a more restrained borrowing posture among higher-risk households.
Matt Fabian, senior director of financial services research and consulting at TransUnion Canada, said the numbers reflect a credit market in transition.
"Credit growth in the second quarter reflected a widening divide across risk tiers. Super prime, prime plus and prime consumers continued to increase non-mortgage borrowing, while subprime consumers modestly reduced balances year over year, pointing to a more cautious borrowing environment among higher-risk households," Fabian said.
Average non-mortgage balances reached $28,118 (a 7.6 per cent jump year-over-year) with auto loans (+7.9%), lines of credit (+7.4%), and personal loans (+7.1%) recording the steepest climbs.
Mortgage stress concentrated in high-cost markets
Canada's mortgage market held relatively steady, with total mortgage balances reaching $1.93 trillion and an on-time payment rate of 99.7 per cent.
But cracks are forming in higher-cost provinces. Serious delinquency rates (60-plus days past due) ticked up in Ontario (+6 basis points), Prince Edward Island (+5 basis points), and British Columbia (+4 basis points), while Alberta and Saskatchewan saw modest improvement.
Fabian cautioned that the headline stability masks underlying pressure. "Although mortgage delinquency rates remain low nationally, signs of credit stress are concentrated in higher-cost housing markets, where borrowers tend to carry larger mortgage balances and face greater exposure to affordability pressures and payment shocks," he said.
New mortgage originations rose 7.8 per cent year-over-year, though average new mortgage balances declined 2.4 per cent to $354,683 — a sign that affordability constraints are tempering how much buyers are borrowing.
Rising insolvencies add a warning signal
While overall delinquency rates declined to their lowest level in two years ( 30-plus days past due fell to 4.27 per cent) the consumer insolvency rate rose to 1.10 per cent in Q2 2026, up from 0.94 per cent in Q2 2024.
Consumer proposals now account for approximately 80 per cent of all insolvency filings, with bankruptcies making up the remainder.
Fabian described the divergence as one of the more nuanced credit dynamics in the current environment. "The gap between stable delinquency and rising insolvency is one of today's more nuanced credit dynamics. On one hand, delinquency metrics suggest the market remains resilient; however, rising insolvency filings show that certain consumers, especially those without the asset buffer of homeownership, face growing financial pressure," he said.
Doomspending: spending as emotional relief
The financial pressure evident in TransUnion's data appears to be fuelling a parallel trend identified in NerdWallet Canada's new survey: doomspending.
The survey, which polled 1,516 Canadian adults, found that 66 per cent made non-essential purchases in the past six months partly because economic concerns made enjoying the present feel more urgent. Of those, 45 per cent did so more than once.
The behaviour cut across age groups but was most prevalent among Canadians aged 18 to 34, with 75 per cent reporting doomspending.
Among respondents aged 35 to 54, the rate was 67 per cent and this cohort reported the steepest financial consequences: 32 per cent said they had carried or increased debt as a result, compared to 21 per cent across all doomspenders, and 22 per cent said they had cut back on necessities.
The motivations were telling: 54 per cent said they were seeking mood relief or a distraction from stress, 47 per cent wanted something to look forward to, and 21 per cent explicitly cited an uncertain future as the reason. Notably, 40 per cent believed the money saved "would not have made a meaningful difference" anyway.
