Why millennials in Canada are hardest hit by debt: ‘Living on the edge’

On a per-population basis, millennials were 1.4 times more likely to file for insolvency than people in generation X aged 42 to 56, a study shows.

Insolvency trustee Doug Hoyes encounters a lot of Canadians with money troubles, but he’s become particularly sympathetic to the plight of young people who find themselves financially underwater.

For more than a decade, his Ontario-based firm Hoyes Michalos has been crunching bankruptcy and insolvency numbers for its annual “Joe Debtor” analysis, with its latest results released last month ahead of tax season.

He’s concluded that millennial Canadians have been dealt a generational losing hand as they face student loans layered with bad debts from credit cards, high-interest loans, and post-pandemic tax debt from collecting CERB.

“I think there’s a whole bunch of whammies that have hit millennials.” Hoyes said. “The CERB was the final straw that broke the camel’s back.”

The 2022 Joe Debtor study examined 2,700 personal insolvencies filed in Ontario. Hoyes Michalos says 49 per cent were filed by millennials aged 26 to 41, even though they make up 27 per cent of adult Canadians.

The study found that on a per-population basis, millennials were 1.4 times more likely to file for insolvency than people in generation X aged 42 to 56, and 1.7 times more likely than baby boomers aged 57 to 76.

Insolvent millennials were on average 33 years old and owed an average of $47,283 in unsecured debt.

Hoyes said many people collected CERB and other pandemic-relief funds without fully appreciating the tax liabilities those programs generated, finding themselves insolvent and unable to pay down their credit cards, student loans, high-interest loans, and lastly their tax debts.