What to know
49 per cent of Canadians with debt say they’re living paycheque to paycheque, reflecting widespread financial strain.
36 per cent of credit card holders carry a balance, with many using credit to cover shortfalls.
Wages have not kept pace with the cost of living, forcing Canadians to budget more tightly and cut spending.
Younger Canadians are more likely to rely on credit, while others are delaying savings and focusing on paying down debt.
As the cost of living continues to climb, a growing number of Canadians say they’re barely staying afloat, and for many in Toronto, that reality hits close to home.
New data from Vividata’s Study of the Canadian Consumer Winter 2026 reveals that 49 per cent of Canadians carrying debt report living paycheque to paycheque, highlighting the financial strain many are facing right now.
The findings come just ahead of the Bank of Canada’s next interest rate decision, showing how rising costs — from groceries to housing — are reshaping how people manage their money.
According to the survey, financial pressure is widespread among Canadians with debt. More than half (58 per cent) say they have less disposable income than before, while 51 per cent say they need to stick to a strict budget just to make ends meet.
For a lot of people in the country, credit cards are becoming less of a convenience and more of a lifeline. The report found that 36 per cent of Canadian credit card holders carry a balance, often using credit to cover gaps when money runs short.
What’s driving the paycheque to paycheque reality?
While the survey doesn’t directly measure causes, Vividata’s President and CEO Pat Pellegrini says the trend reflects deeper, long-term financial shifts.
“I think there’s two things,” Pellegrini said. “One, wages in Canada have not kept up with the rate of inflation… and then I think debt levels, people’s attitudes about taking credit, have changed over generations.”
He points to a widening gap between income and cost of living—especially in cities like Toronto—where salaries haven’t kept pace with rising expenses.
“Thirty years ago, some starting salaries in cities like Toronto, not that different [than today], but the cost of living is much more,” he said. “So I think, people have to live more carefully than they did in the past.”
At the same time, access to credit has reshaped spending habits, particularly among younger Canadians.
“Even if they don’t need it, they will take offers to have credit,” Pellegrini said.
“If they want to live a certain lifestyle, they will use their credit card instead of having money to pay for it.”
That reliance on credit can quickly snowball.
“Once you have non-mortgage debt, and unsecured types of lines, you can end up with quite a bit of debt in your credit card,” he added.
Reactions from Torontonians
On the streets of the city, many say the numbers reflect what they’re already living through.
“It doesn’t surprise me at all,” Rebecca said, who recently lost her job due to cuts.
“I’m now in that position myself, and I know for lots of folks, the job market is very rough right now.”
She says the rising cost of living has forced her and those around her to rethink housing, but options are limited.
“People are trying to find cheaper places, but it’s only a couple of hundred dollars in difference; it’s a drop in the bucket.”
Amy S. pointed to inflation and stagnant wages as key pressures.
“Surprised? Not at all, not in this economy. Everything is quite expensive, we’re not getting raises, we’re not getting promotions, people can’t keep up.”
To cope, she’s cut back on spending. “Less going out, less restaurants, eating more at home. Even subscriptions, trying to check everything and remove what I don’t need.”
For others, the experience is already the norm.
“Me and my boyfriend live paycheque to paycheque, and I think everybody else I know in the city does as well,” Morgan said. “Groceries are expensive.”
Joan E., who has worked in the food industry for nearly a decade, says the struggle isn’t new.
“It’s pretty awful having to live paycheque to paycheque, but it isn’t really surprising, it’s the norm.”
Even those not currently struggling say the trend makes sense.
“With the cost of living going up all the time, it’s not surprising.” He added that he isn’t currently living paycheque to paycheque, but recognizes how common it’s become, and how fortunate he is.
A shift toward “survival spending”
Beyond day-to-day budgeting, Pellegrini says the bigger concern is what this means long-term.
“You can’t live like you want to live and save in your 20’s and 30’s… it’s just not what’s happening,” he said.
Instead, many Canadians are delaying savings and focusing on managing debt, what he describes as a fundamental shift in financial behaviour.
“Instead of saving, they’re servicing their debt,” Pellegrini said, pointing to survey findings that show Canadians are increasingly using credit as a “safety valve” when money is tight.
The emotional toll is also rising. More than a third (37 per cent) of Canadians with debt say they feel overwhelmed by financial burdens, while 71 per cent say rising costs have reduced their ability to save.
And while the inflation economic indicator may suggest stability, Pellegrini says they don’t reflect lived reality.
“That is more the reality than putting out a percentage number like ‘oh well, inflation is only 1.8 per cent, so we’re all in good shape.’ I don’t think so,” he said.