Ontario seeing spikes in people defaulting on housing and other bills

The cost of living in Ontario has become astronomical (and is getting worse), our unemployment rate is skyrocketing, U.S. tariffs on Canadian imports are weighing on everyone, and a recession is on the horizon, if not already here.

So, it's no wonder that more and more people across the province and country are straining to cover their basic costs of living, including their rent, mortgage, credit card and other bills — particularly if they live in and around Toronto.

Credit reporting firms and other stakeholders have for months been raising alarm bells about the nation's growing consumer debt — which ballooned to a staggering $2.56 trillion by the end of 2024 — as well as escalating delinquency rates for mortgage and other payments.

New data from RBC further bolsters these concerns, with the bank's executives this week citing an uptick in residential mortgage holders defaulting on their payments.

Ontario sees huge surge of people not paying their housing and other billshttps://t.co/bV6uQCBRZO

— blogTO (@blogTO) August 28, 2024

During a recent investor presentation and subsequent Q2 earnings call, it was revealed that the number of homeowners who are 90 days or more past due on their mortgage bills with RBC has shot up to 30 basis points, a two-point increase from the previous quarter and a whopping 11-point increase from the same time in 2024.

There was also talk of the sudden rise in the bank's GIL (Gross Impaired Loans) ratio in the last year, impaired loans being those that are not being repaid on time.

This "impairment" in making payments is, according to RBC Chief Risk Officer Graeme Hepworth, due to "more clients facing challenges in this higher rate environment," and is driven by areas like the GTA, which now has a 90-day mortgage delinquency rate of 0.39 per cent.

Comparatively, Vancouver's rate of failed mortgage payments with RBC is only 0.12 per cent, while the rate across Canada is 0.30 per cent, per Canadian Mortgage Trends.

Ontario sees another enormous jump in people not paying housing and other bills https://t.co/MZtYPoFMBl

— blogTO (@blogTO) February 27, 2025

Call participants did note, though, that "consumer clients continue to show resilience" before adding that "unemployment is expected to lead to higher losses in our unsecured portfolios."

"We expect housing resell activity and mortgage growth to remain contained in the near term as the uncertainty around tariffs outweighs lower debt servicing costs from lower interest rates," they continued, noting overall market volatility alongside economic weakness and uncertainty that is "dampening confidence and sentiment."