Canadian businesses are increasingly falling behind on their credit payments even as they reduce their credit use.

Canada’s national 60-plus day delinquency rate for financial trades — bank loans, credit cards and lines of credit — rose 11.37 per cent year over year in the first quarter, while the 60-plus day delinquency rate for industrial trades — payments to suppliers and partners — fell 26.15 per cent, according to a new report from Equifax Canada.

“Many businesses seem to be protecting the day-to-day supplier relationships needed to keep operating, while also managing bank debt, longer-term loans and other lender obligations,” Jeff Brown, head of commercial solutions at Equifax Canada, said in a news release. “This appears to be a continuation of the divide we saw late last year.”

Regionally, financial trade delinquencies were highest in Ontario at a rate of 4.22 per cent, while they were lowest in Prince Edward Island at 2.88 per cent, but it still had the highest year-over-year growth in delinquencies in Canada.

Despite the national rise in delinquencies, businesses are paring down their use of credit. Total line-of-credit balances fell 21.3 per cent in the quarter, while business credit-card balances fell 17.2 per cent. Yet loan instalment debt climbed three per cent to an average of $129,421.

“Reducing credit-card and line-of-credit balances can be a sign of discipline, but it does not automatically mean business conditions are improving,” Brown said. “The concern is that some businesses are carrying more longer-term debt. If late payments start to rise on those obligations, it could cause deeper cash-flow strain.”

Rising costs and economic uncertainty are making it harder for Canadians to start a business. The number of businesses two years old and younger decreased by 38.7 per cent and fewer people are inquiring about loans to start a business, said Equifax.

Echoing Equifax’s results, the Canadian Federation of Independent Business’ (CFIB) monthly business barometer fell below 50 in May, meaning more than half of small businesses are expecting weaker performance in the next three and 12 months.

On the flip side, Business Development Bank of Canada’s Canadian Small Business Health Index climbed by 1.5 per cent in the first quarter on improved economic sentiment, but analysts expect the Iran war to bring sentiment back down.

Sinead Gleason, commercial solutions lead at Equifax Canada, said the current economic conditions make business decisions more difficult.

“The current economic environment means that it is more important than ever for lenders to try and get business credit decisions right,” Gleason said in the release. “While lenders have traditionally relied on the personal credit profile of the business owner to make the credit decision, Equifax data shows that lenders might want to consider a different approach.”

Sign up here to get Posthaste delivered straight to your inbox.


Canada reported its largest trade surplus since before U.S. President Donald Trump’s tariff regime, though the figure is buoyed by higher energy prices.

Overall, the $2.7 billion trade surplus in April is the largest the economy has seen since January 2025 and followed a $1.8 billion surplus a month prior.

Total exports were up three per cent in the month, with energy exports up 9.7 per cent.

Exports of farm, fishing and agriculture products also increased by 8.9 per cent in April, reaching their highest levels since January 2025.

Read more here.

  • 9:45 a.m.: Bank of Canada interest rate announcement
  • Today’s Data: U.S. consumer price index for May
  • Earnings: Oracle Corp., Chewy Inc., Foran Mining Corp.

  • Canada’s economy posts biggest trade surplus since before Trump’s tariffs
  • Bank of Canada not ‘in a rush’ to rescue housing markets, says top strategist
  • Why companies are burning through AI tokens and racking up eye-watering bills
  • The ‘biggest knock’ against Canada’s trade numbers also undercuts one of Carney’s economic pillars, economist says

During the pandemic, Paul and Elizabeth decided to take chance on Canadian energy companies and went all in.

Today, the couple’s TFSAs are worth $3.5 million and generate $12,000 in dividends each month. Now in their 40s, they would like to retire when they each turn 55, or even 50, just two years from now for Paul. Can they do it? Find out what Family Finance has to say.

Interested in energy? The subscriber-only FP West: Energy Insider newsletter brings you exclusive reporting and in-depth analysis on one of the country’s most important sectors. Sign up here.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.

Financial Post on YouTube

Visit the Financial Post’s YouTube channel for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Ben Cousins with additional reporting from Financial Post staff and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at posthaste@postmedia.com .

  • Want to restart housing construction? Cut development fees
  • Is the World Cup really a boon for the economy?

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here