A new report from the Credit Counselling Society (CCS) highlights the growing financial challenges facing Canadians, with rising debt levels and ongoing economic pressures leading to significant stress and anxiety. The 2025 Consumer Debt Report, based on a survey conducted by the Angus Reid Forum, reveals that seven-in-10 Canadians (71 per cent) are most concerned about the increasing cost of living, a key factor contributing to rising debt and financial strain.
“Consumers were already feeling the strain of increased day-to-day expenses,” explained Peta Wales, President & CEO of the Credit Counselling Society. “Then, as additional information about potential tariffs emerged in the weeks leading up to President Trump’s inauguration, the likelihood of price increases and even the potential for job losses, only heightened feelings of anxiety and stress.”
Debt Fatigue and Complacency on the Rise
Over half of Canadians (54 per cent) are worried about their debt, with the number of those feeling anxious skyrocketing to 84 per cent among those who have seen an increase in debt over the past year. Despite the overwhelming stress, a startling 57 per cent of Canadians report being complacent about their debt, with many taking no action to address their financial situation.
“Unfortunately, we continue to see a trend of Canadians normalizing debt with a focus on only addressing their minimum payments,” stated Wales. “With record-high debt levels, consumers are grappling with the rising cost of living, and credit cards—once used primarily for emergencies—are now being used to carry month-over-month balances.”
Among respondents who reported an increase in debt, 54 per cent said it impacts their mental wellbeing. For those uncomfortable with their debt levels, 60 per cent said it negatively affects their outlook on life.
The study also found that those who are anxious about their debt are nearly three times as likely to fall further behind on payments compared to those who are not anxious (16 per cent vs. six per cent). Unfortunately, many individuals in this group avoid communicating with creditors or seeking professional help.
Debt Fatigue: A Barrier to Financial Relief
Debt fatigue—a mental and emotional exhaustion caused by constant worry over debt—is a significant barrier for many Canadians. The survey revealed that individuals experiencing debt fatigue are far more likely to cry about their debt (19 per cent) than to reach out to creditors (five per cent) or credit counsellors (eight per cent). Many also delay or defer payments, compounding the problem.
“The danger with becoming complacent about your obligations is that a small shift in your circumstances—such as reduced hours at work or an increase in the cost of an essential, like gas—can suddenly make your financial situation extremely difficult to manage,” explained Isaiah Chan, VP of Programs & Services at CCS.
Proactive Measures: Canadians Taking Action Against Rising Debt
While many Canadians struggle with debt fatigue, a substantial portion of respondents are taking proactive steps to manage their finances. The survey revealed that 70 per cent of Canadians who experienced an increase in debt this past year cut back on essentials, 34 per cent sold personal items, 12 per cent changed their living arrangements, and 44 per cent sought assistance from a financial advisor.
“Surprisingly, of Canadians who had an increase in debt this past year, we also saw that 44 per cent took on a second job as they worked to proactively manage their higher debt load,” explained Wales. “While this was almost three times higher than the prior year (at 16 per cent), it may not remain a viable option if the economy contracts due to geopolitical circumstances.”
Financial Strain and the Need for Early Action
For many Canadians, cutting back on essentials like food (77 percent) and recreation (72 percent) has become a necessary step to make ends meet. However, experts warn that waiting until debts become unmanageable can lead to higher interest rates, more drastic solutions, and increased stress.
“It’s always very concerning when someone struggles to pay for their day-to-day expenses and, with savings exhausted, risks undermining any of their remaining financial stability through high levels of consumer debt,” revealed Chan.
Anne Arbour, Director of Partnerships & Education at CCS, emphasized the importance of early intervention. “Waiting to take action until debts become unmanageable can result in higher interest rates, more drastic solutions, and ultimately more stress and sleepless nights. Taking steps early on is when someone can make the biggest impact on improving their finances and overall wellbeing.”
A Call for Action: Don’t Let Debt Fatigue Take Control
While many Canadians are experiencing significant financial challenges, the survey results show that it’s possible to take control and avoid the negative impacts of debt fatigue. As Arbour explained, “When it comes to what Canadians worry about most, problems with money tops the list. However, consumers often suffer in silence because they are more uncomfortable talking about their debt than they are personal relationships or even struggles with physical and mental health.”
Despite uncertainty around the future, including the potential impact of tariffs and other economic factors, Arbour urges Canadians not to let anxiety or embarrassment prevent them from seeking help. “We can’t predict what the next four years will hold for us economically, politically, or financially. But tariffs or no tariffs, don’t let anxiety or embarrassment deter you from reaching out for the help you need. Debt fatigue is a genuine concern, and complacency is not an effective solution.”
About The Credit Counselling Society (CCS)
The Credit Counselling Society is a non-profit organization dedicated to helping Canadians manage their money and debt more effectively. CCS offers free, confidential credit counselling, debt repayment options, budgeting assistance, and financial education to support individuals in achieving financial stability.
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