Prime Minister Mark Carney delivers remarks at the Canada Day ceremony at LeBreton Flats in Ottawa on July 1.Justin Tang/The Canadian Press
John Turley-Ewart is a contributing columnist for The Globe and Mail, a regulatory compliance consultant and a Canadian banking historian.
Forward guidance is a tactic used by central bankers to signal policy intentions and rationale. Executed well, it constrains volatility by shining a light into the economic shadows so markets needn’t stumble around in total darkness.
Prime Minister Mark Carney has adapted this tactic to politics. His Canada Day 17-minute explanation of the country’s new energy initiatives is an example. Forward guidance has delivered political stability – Mr. Carney’s majority government is a testament to that.
Putting the political high beams on may help Canadians see some way up the long road Mr. Carney wants to take us down, but it does little to improve the road we are travelling on today. It is littered with years of economic wreckage. Thousands now turning to buy now, pay later schemes for groceries is telling. Alarming too is the continuing rise in personal debt, insolvencies and bankruptcies.
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Mr. Carney has proven his geopolitical chops and laid out a long-term economic vision. His priority now should be to connect both to immediate, material relief for Canadians in the federal budget due this fall.
The personal financial crisis in Canada has been building for several years now. An examination of household finances by the C.D. Howe Institute points out that by 2025, households with the lowest incomes in Canada were spending almost $40,000 above their annual disposable income.
This pattern continues up the economic chain into what were once middle-class incomes – households making between $62,000 and $88,000 a year are also typically running deficits. The outcome shows up in household credit market data, as Graeme Gordon of politics and economics commentary website the Hub has catalogued.
Households owe more than $3-trillion, have a debt-to-disposable income ratio of $1.80 and continue to borrow at a pace that exceeds income growth. TransUnion, a credit reporting agency, pegs unpaid credit card balances at new highs, $124-billion.
Insolvency statistics from the Office of the Superintendent of Bankruptcy for the first quarter of 2026 reveal that more than 38,000 Canadians either declared bankruptcy or made a consumer proposal to their creditors seeking relief from the debt payments burying them. The year-over-year increase is almost 8 per cent across Canada.
National numbers are a disservice to the financial “rupture,” a word Mr. Carney likes to use, happening in some provinces. Ontario is enduring the brunt of it. Personal bankruptcies have surged by 25 per cent according to 2026 first quarter numbers. Consumer insolvency proposals are up nearly 12 per cent as well.
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British Columbian personal bankruptcies are up almost 9 per cent year-over-year. In Alberta, the increase is about 11 per cent. Bright spots could be found in Saskatchewan and Quebec, where personal bankruptcies declined year-over-year.
Neither Saskatchewan nor Quebec had housing markets go off the rails.
Housing matters in the data now. More homeowners are conceding that the dream of homeownership and a middle-class life have vanished.
Scott Terrio, a consumer insolvency manager at Hoyes Michalos & Associates, told the Hub that the story isn’t so much the volume of bankruptcies but who is filing: “The big thing we see now that we weren’t seeing a year ago or a year and a half ago is homeowners.”
Mr. Terrio points to the Hoyes Michalos Homeowners Bankruptcy Index as evidence. It shows a steady increase, month over month, of insolvent debtors that own a home, touching 12.6 per cent in May. The record high, according to Mr. Terrio, is 34.8 per cent in 2011. “We are heading back there,” in Mr. Terrio’s opinion.
Mr. Carney’s Canada Day forward guidance on energy policy takes inspiration from one of the country’s great builders and Ontario Conservative politician, Sir Adam Beck, who, according to historian H.V. Nelles, “brought the inestimable benefit of cheap electric light and power to the citizens of Ontario” in the early twentieth century.
The Prime Minister would do well to take inspiration from yet another Conservative from our past, one who tackled economic hardship with targeted, temporary fiscal stimulus, allocating billions in labour market and employment insurance enhancements, and billions in personal and corporate tax relief that helped push the country out of an economic rut.
He need not even consult our history books for the details. Mr. Carney can cast his mind back to being the governor of the Bank of Canada and collaborating with the late federal finance minister in Stephen Harper’s Conservative government, Jim Flaherty, on implementing these measures in response to the Great Recession of 2008-2009.
The federal budget is fast approaching. Mr. Carney would be well-served if it too was grounded in lessons from the past. It would give many Canadians the forward guidance they are most looking for.