Financial Strain Grows in Ontario, Including Thunder Bay

Over 1.4 million Canadians missed credit payments in Q1 2025, with Ontario seeing a 24% spike in non-mortgage delinquencies — the highest in the country. In cities like Thunder Bay, where household debt remains above the national average, these rising delinquencies may point to increasing vulnerability among younger and lower-income residents.

Younger Canadians Struggle as Credit Card and Auto Loan Defaults Climb

Canadians under 26 are facing a sharp increase in delinquency rates, with credit card defaults rising 21.7% and auto loan delinquencies jumping 30%. This reflects financial strain due to high inflation, rising rent, and limited wage growth — challenges especially pronounced in smaller urban centers like Thunder Bay.

Mortgage Renewals Dominate Activity — But Relief is Uneven

Refinancing accounted for the bulk of mortgage activity in early 2025, as the so-called “Great Renewal” unfolds. While some Ontarians are switching lenders for better rates, affordability remains a challenge, with the average mortgage size up 7.5% despite payment relief. In Thunder Bay’s still-accessible market, first-time homebuyer interest may remain relatively resilient.

Spending Drops as Consumers Shift to Survival Mode

Credit card spending dropped across Ontario in Q1, with average monthly spend falling to its lowest level in three years. Payment rates also declined, particularly among younger consumers — a sign many are prioritizing essentials and falling behind on debt payments.

Debt Trends in Northwestern Ontario: Why It Matters Locally

Thunder Bay and the broader Northwestern Ontario region often lag national financial trends by a few quarters, but the rise in delinquencies elsewhere is a cautionary signal. Local lenders and policymakers may need to prepare for increased defaults, especially among youth and families with auto loans.