Late Payments by Industry in Canada: Which Sectors Are Struggling Most in 2025?

As of March 2025, Canadian businesses are still under heavy financial strain. Core costs such as wages, rent, and raw materials remain high, and consumer spending is increasingly cautious. For many industries, this economic tension is showing up where it hurts most—in overdue invoices and rising delinquency rates.

At CGI Credit Guard, we work daily with businesses trying to recover what they’re owed. That perspective gives us a unique, data-backed view of which industries are experiencing the most trouble with late payments—and why. In this article, we explore the sectors under the greatest pressure and offer tips to help businesses protect their cash flow.

Construction and Late Payments by Industry in Canada

Few industries are as consistently plagued by late payments as construction. A recent British Columbia Construction Association (BCCA) survey revealed:

91% of construction businesses reported late payments in the last year.

69% said they were not paid at all for at least one completed job.
(Source: BCCA)

Equifax Canada’s Q2 2024 report also shows that financial trade delinquencies in construction rose from 2.9% to 3.3% year-over-year. (Source: Equifax Canada)

Why Construction Suffers:

• Complex pay chains: General contractors, subcontractors, and suppliers rely on staggered payments, creating cascading delays.

• Disputes and delays: Disagreements over scope, change orders, and completion timelines often hold up payment approvals.

• Legislative gaps: While Ontario introduced prompt payment rules, other provinces have yet to adopt similar legislation—leaving many firms without recourse.

Pro Tip: Contractors and suppliers should clearly define payment terms in all contracts and escalate overdue accounts to third-party collectors no later than 60 days past due.

Retail Sector and Late Payments by Industry in Canada

Retailers are also under significant financial pressure. According to Equifax Canada, retail businesses saw a rise in delinquencies from 3.7% to 4.2% in just one year. (Source: Equifax Canada Q2 2024 Report)

The combination of rising interest rates and high household debt has made Canadian consumers more conservative with their spending—directly impacting retailers’ cash flow. While commercial real estate outlooks from CBRE suggest that retail space demand remains strong in 2025, this doesn’t always translate into reliable payment cycles. (Source: CBRE Market Outlook 2025)

What’s Driving the Delays:

• High operating costs: Fixed lease payments, labour, and supply chain issues are putting pressure on retailers’ liquidity.

• Stock issues: Over ordering during uncertain demand cycles has left many retailers with excess inventory they can’t move quickly.

• Small business fragility: Many independent retailers are operating month-to-month, making supplier payments increasingly inconsistent.

Pro Tip: Retailers should tighten internal billing cycles and consider incentives for early payments. If you’re a vendor, monitor payment behaviours and act quickly when delays extend past agreed terms.

Professional Services and the Impact of Late Payments by Industry in Canada

Professional service firms lawyers, consultants, accountants, and agencies aren’t usually considered high risk when it comes to payments. But in 2025, many of these businesses are quietly struggling to maintain timely receivables.

While hard data is limited, widespread anecdotal evidence shows increasing instances of slow payments and rising Days Sales Outstanding (DSO) metrics across the sector.

Key Causes:

• Deferred payment models: Many professionals bill at project completion or based on lengthy milestones, which can delay invoicing.

• Corporate red tape: Larger clients may take 45–90 days to approve and issue payments, even when funds are available.

• Service undervaluation: In price-sensitive markets, clients may deprioritize service invoices in favour of tangible supply costs.

Pro Tip: Introduce partial upfront billing or milestone payments to avoid backloaded collections. For long-term clients who repeatedly delay, implement late fees and consider engaging third-party collection support before internal capacity is wasted.

Industry Delinquency Snapshot (2025)

Although inflation headlines are improving, the real-world financial strain on businesses remains intense:

• Credit is more expensive.

• Consumer confidence is unstable.

• Operating costs are still high.

Every day a payment is delayed, your receivable loses value—not just due to inflation, but due to aging, opportunity cost, and reduced recoverability. In fact, debts more than 90 days past due have recovery rates below 50%.

Action Plan: How to Guard Against Late Payments by Industry in Canada

Whether you’re in construction, retail, or professional services, here’s how to protect your business:

• Set clear payment terms—Include late fees and due dates in writing.

• Run credit checks—Especially with new clients in high-risk industries.

• Track Days Sales Outstanding (DSO) Monitor the time it takes to get paid.

• Act early on late accounts—Don’t wait past 45–60 days to escalate.

• Use a licensed collection agency—Outsource recovery to professionals like CGI Credit Guard when internal efforts stall.

Partner with CGI Credit Guard for Proven Results

At CGI Credit Guard, we specialize in helping Canadian businesses recover outstanding receivables. We act decisively, legally, and respectfully—so you can reclaim lost revenue without exhausting your internal team.

Whether you’re a supplier, contractor, or service firm, our expertise in third-party debt recovery gives you the tools to stabilize cash flow and reduce bad debt risk.

Phone: 1-800-454-8864
Email: info@cgicreditguard.com
Website: www.cgicreditguard.com