Canadian entrepreneur Yanik Guillemette calls for action as data shows struggle for households
The pressure of rising prices and lagging wage rises continues to impact the finances of Canadian households.
The latest Harris & Partners Financial Resilience Index, compiled from more than 12,000 survey responses gathered across a series of national studies, finds that for a growing majority of Canadians, income no longer stretches far enough to cover the basics and the gap is widening.
More than half of respondents (57%) reported that their earnings fell short of covering fundamental costs including rent, groceries, and utilities. That figure has since compounded into a broader pattern of deprivation: nearly 89% of those surveyed are living paycheque to paycheque, and 82.9% have cut back on essentials such as food and heat.
"We speak with people every day who are earning more than they ever have in their careers but still can't keep up with grocery bills or rising rents," said Joshua Harris, CEO and licensed insolvency trustee at Harris & Partners. "When the basics become unaffordable, financial resilience doesn't just erode — it vanishes."
Guillemette calls for action
The cost of living and labour market squeeze recently led prominent Montreal-based entrepreneur and investor Yanik Guillemette to warn that the country is entering a dangerous economic and social spiral.
"This situation no longer makes sense," he said. "We are watching one of the fastest deteriorations in employment conditions outside of a formal recession or pandemic environment, while governments continue acting as if the economy is fundamentally healthy."
Guillemette said that, despite being told that inflation is improving, households are struggling and taking on debt. And he’s called on policymakers to do more.
"An economy cannot survive indefinitely on debt expansion, population growth statistics, and government messaging," he emphasized. "People need stable jobs, affordable housing, security, and a realistic path toward economic mobility. Right now, millions of Canadians feel like that path is disappearing."
Borrowing to survive
With household budgets under relentless pressure, borrowing has become less a tool for opportunity and more a mechanism for basic survival.
More than half of respondents to the Harris & Partners survey said they had taken on debt over the past two years simply to cover everyday living expenses. Close to two thirds used credit within the last year to pay for necessities, and 77% said they could not absorb a $500 emergency without incurring new debt.
Among the 569 payday loan users included in the research, the picture is especially stark: 71% borrowed to cover essential costs, 40% to manage emergencies, and 44% reported difficulty repaying. Recent changes to Canada's criminal interest rate led lenders to tighten their criteria, reducing the availability of regulated credit options for lower-income borrowers.
"People feared turning to unregulated lenders," Harris said. "And based on the conversations we've had, that fear was justified. When legal credit tightens in a country with declining financial resilience, people don't stop borrowing — they just borrow unsafely."
Financial anxiety
The psychological consequences are proving just as significant as the financial ones.
Six in ten respondents said they go to bed worrying about money, 46% report losing sleep over financial pressure, and 68.4% say their debt causes them persistent anxiety. Perhaps most telling is the scale of financial secrecy: 56.6% are concealing their struggles from people close to them, while 76.3% say job or financial stress damaged their mental health over the past year.
"We've entered a period where financial shame is as common as financial stress," Harris said. "People feel embarrassed, or they don't want to worry their spouse, or they think they should just 'cope.' But silent stress is still stress — it eats away at mental health and relationships."
The workplace is offering little relief. The index found 58% of respondents felt emotionally burned out, 52.6% saw their workloads increase without any corresponding pay rise, and 45.1% took on a second job or additional gig work to make ends meet. For many, working harder has stopped being a path to stability and started being a coping strategy — one that still falls short.
Graduates under pressure
More than 60% of graduates expressed regret over taking on student debt, and nearly 85% felt the government should take greater responsibility in addressing it.
With average student debt sitting around $28,000, and starting wages trailing inflation, many young adults are postponing homeownership, healthcare, and family decisions. A Supreme Court ruling that resets the seven-year bankruptcy discharge clock when a borrower re-enrolls in school has further narrowed the path to relief.
"This generation did everything right," Harris said. "They studied, trained, and worked — yet they're entering adulthood already behind. When you add high rents and rising consumer prices, it becomes incredibly difficult to build a stable foundation."
The downstream effects are now showing up in official government data. According to the Office of the Superintendent of Bankruptcy, consumer insolvencies reached 36,256 in the third quarter — the highest figure recorded since 2009, and a number that the index had been signaling for some time.
"These filings confirm what the Index has been signalling," Harris said. "Households simply cannot absorb any more financial shocks. The margin is gone."
Resilient Canadians
Despite the severity of these findings, the research did surface one consistent thread of optimism: 62% of respondents believe their circumstances can improve. Harris, however, is direct about the limits of that sentiment.
"Canadians are strong, capable, and determined. But resilience shouldn't be a replacement for a functioning financial environment. We need structural support, clearer financial education, and easier access to impartial advice."
