Bold Predictions for Credit and Collections Trends in Canada by 2026

Introduction
As 2026 looms on the horizon, Canadian businesses find themselves at a crossroads. With economic forecasts predicting weaker growth and shifting market conditions, credit professionals must navigate an increasingly complex financial terrain. From changing interest rate conditions and digital transformation to industry consolidation and evolving risk appetites, the credit and collections landscape in Canada is primed for disruption—and opportunity. 

At CGI Credit Guard, we stand at the forefront of these changes. As a leading third-party collection agency in Canada, we offer unique insight into the trends shaping the industry. In this forward-looking blog, we unveil bold yet realistic predictions that credit managers, CFOs, and business leaders should prepare for in 2026.

Credit and Collections Trends in Canada 2026

The phrase “credit and collections trends in Canada” isn’t just a buzzword—it’s a critical lens through which Canadian businesses must analyze their current and future financial strategies. By 2026, significant changes in the global and national economy will fundamentally alter how credit is extended and how debts are recovered. Let’s take a deep dive into the emerging dynamics.

Weak Growth Outlook for Canadian Economy

Canadian economic growth is expected to remain tepid well into 2026, with projections indicating GDP growth of less than 1.5%. This sluggish pace has wide-reaching effects on credit issuance and collection strategies. Businesses will need to become more selective in approving credit, placing a heavier emphasis on cash flow forecasts and payment history. Credit risk will become a more prominent part of business planning, particularly in resource-heavy provinces like Alberta and Newfoundland where volatility is higher.

Changing Credit Risk Appetite Across Industries

Given the uncertain economic backdrop, credit managers are reassessing risk thresholds. Sectors like real estate, tech startups, and construction may face heightened scrutiny, while more recession-resilient sectors like healthcare and food services might benefit from looser terms. Credit scoring models will need refinement, integrating macroeconomic indicators alongside traditional factors.

Increased Business Consolidation

With high operational costs and sluggish demand, many Canadian companies—particularly in retail and manufacturing—are merging or being acquired. For creditors, this trend demands a revision of AR and collection strategies. Consolidated entities may centralize payment processing, shift their terms, or negotiate settlements on old debts.

Slower B2B Payment Cycles

Many Canadian businesses continue to experience slower B2B payment cycles, with some invoices extending beyond standard terms. Cash‑flow constraints, sector‑specific pressures, and internal processing delays can lead to longer DPO (Days Payable Outstanding), which naturally increases DSOs (Days Sales Outstanding) for suppliers. For credit managers, this creates added strain on liquidity planning and reinforces the need for consistent follow‑up procedures and proactive AR management.

Rise in Credit Defaults and Bankruptcies

Some sectors have seen an uptick in defaults and insolvencies, particularly among smaller or highly leveraged businesses. Factors such as tighter credit access, uneven borrowing costs, and demand fluctuations have created financial pressure for certain companies. For credit managers, early risk identification, customer segmentation, and proactive collection strategies remain critical to minimizing exposure.

The Role of AI and Automation

Artificial intelligence will revolutionize the credit and collections process in Canada. Expect AI-powered chatbots for debtor interaction, machine learning algorithms that predict payment behaviour, and automation tools that reduce human error. Forward-thinking businesses will deploy these tools to manage large volumes of credit data with precision and agility.

Regulatory and Legal Landscape in 2026

Compliance will be a hot topic. With evolving privacy laws, especially around data handling in debt collection, businesses must stay ahead of new provincial and federal regulations. Agencies like CGI Credit Guard continuously adapt our practices to meet or exceed all legal standards, ensuring client protection and reputation.

SME Credit Challenges

Small and medium-sized enterprises (SMEs) continue to face pressure from economic slowdown and uneven borrowing conditions—especially those carrying debt taken on during periods of higher interest rates. SMEs often present elevated credit risk for many businesses, largely due to tighter cash flow and limited financing options. As a result, tailored credit strategies and stronger monitoring processes remain essential for managing exposure to SME accounts.

Interest Rate Pressures

After elevated interest rates in 2023 and early 2024, the Bank of Canada has reduced its policy rate through 2025. While borrowing costs have eased somewhat—especially for those with variable-rate debt—some businesses are still feeling the effects of earlier rate hikes. Credit professionals must balance flexibility with risk control in an environment of shifting financial conditions.

Shifts in Consumer Spending Affecting B2B Credit

Changing consumer spending habits—especially in discretionary categories—continue to impact certain sectors, including retail, travel, and entertainment. For some businesses, softer demand has led to revenue fluctuations, which may affect their ability to meet payment terms. B2B suppliers can reduce risk by monitoring financial signals early, implementing client-level tracking, and adjusting credit terms as needed.

Sector-Specific Credit Risk in 2026

Each sector presents unique credit challenges. Healthcare has remained relatively stable, while the energy sector continues to navigate pricing volatility and regulatory shifts. Construction activity tends to fluctuate based on project cycles and financing conditions, and retail is still adjusting to omnichannel demands and changing consumer behaviour. With such diversity across industries, a one-size-fits-all credit policy is no longer effective—granular risk analysis and tailored credit strategies are essential.

Data-Driven Credit Management Strategies

The best decisions stem from the best data. In 2026, leveraging real-time credit monitoring, payment behaviour tracking, and macroeconomic data will be standard practice. Firms that integrate these tools into their ERP or CRM systems will gain a serious competitive edge.

Growth in Credit Insurance Uptake

Many Canadian firms will hedge risk using credit insurance. This protective measure ensures that in case of non-payment, insurers absorb the loss. However, it’s not a replacement for good credit management—it’s a safety net, not a crutch.

Partnering with Third-Party Agencies

In today’s high-pressure credit environment, more companies are partnering with trusted third-party agencies like CGI Credit Guard to manage overdue accounts. This strategic approach enables businesses to reduce operational burden, improve cash flow, and maintain client relationships—while ensuring professional, ethical, and compliant recovery efforts.

Customer-Centric Collections Approaches

Empathy in collections is no longer optional—it’s strategic. Treating debtors with respect, offering flexible solutions, and maintaining brand reputation through considerate communication are hallmarks of successful collection efforts in 2026.

Financial Stress Testing: A New Necessity

Simulating “what-if” financial scenarios will help businesses prepare for potential downturns. Credit teams should run simulations on customer defaults, supply chain interruptions, and potential interest rate fluctuations to maintain a resilient balance sheet.

Customized Credit Policies

Generic terms won’t cut it in 2026. Personalized payment terms, discounts for early settlement, and stricter terms for high-risk accounts will become the norm. Flexibility, backed by data, drives better outcomes.

Proactive AR Management Is Non-Negotiable

Instead of reacting to overdue accounts, 2026 will be about prediction and prevention. Automated reminders, dynamic scoring models, and early interventions help companies improve their DSO and free up cash flow.

How the Banking Sector Shapes Credit Policy

Banks tightening credit standards affects how businesses extend credit. Companies may mimic stricter lending models or partner with fintechs offering alternative financing and credit solutions.

Emerging Collection Technologies to Watch

Expect digital wallets, AI payment negotiations, and blockchain-based contracts to enter mainstream collections. These innovations reduce friction, increase recovery rates, and improve debtor experience.

How CGI Credit Guard Supports Canadian Businesses in 2026

At CGI Credit Guard, we go beyond collections. Our data insights, ethical collection practices, and forward-thinking strategies help businesses build resilience and improve recovery rates. We’re not just your agency—we’re your partner.