Priority Debts in Canada: Which Debts to Pay First (2026)
Updated
When you can’t pay all your bills, the order in which you pay them matters enormously. Missing a credit card payment hurts your score but missing rent gets you evicted. Missing a CRA payment lets the government garnish your wages without even going to court. The distinction between priority and non-priority debts isn’t about the interest rate or the balance — it’s about what the creditor can do to you if you don’t pay. Priority debts protect your shelter, your heat, your freedom, and your income. Everything else can wait.
Priority vs Non-Priority Debts
Priority Level
Debt Type
Consequence of Non-Payment
Critical
Rent / mortgage
Eviction / foreclosure
Critical
Utilities (heat/electricity)
Disconnection
Critical
Child support / alimony
Wage garnishment, jail
Critical
CRA tax debt
Wage garnishment, asset seizure (no court needed)
Critical
Court fines
Arrest warrant
High
Secured car loan
Vehicle repossession
High
Condo fees
Lien on property, legal action
High
Insurance premiums
Loss of coverage
Medium
Student loans
Wage garnishment, CRA intercept
Lower
Credit cards
Credit score damage, collections
Lower
Personal loans (unsecured)
Credit score damage, collections
Lower
Lines of credit (unsecured)
Credit score damage, collections
Lower
Medical debt
Collections (no direct legal power)
Lower
Buy now pay later
Collections, credit impact
Understanding Consequences
Critical Priority: Shelter
Debt
If You Don’t Pay
Timeline
Rent
Eviction process begins
Varies by province (14-60 days notice)
Mortgage
Foreclosure / power of sale
After 3-6 months typically
Property tax
Lien on home, eventually tax sale
2-3 years of arrears
Critical Priority: Utilities
Utility
Disconnection Rules
Winter Protection
Electricity
Notice required, then disconnect
Some provinces ban winter shutoffs
Natural gas
Notice required, then disconnect
Ontario: Nov 15 - Apr 30 protection
Water
Rarely disconnected (essential service)
Most jurisdictions don’t disconnect
Internet/phone
Can be disconnected
No seasonal protection
Critical Priority: Government
CRA is the most powerful creditor in Canada and the one most people underestimate. Unlike every other creditor on this list, CRA does not need a court order to garnish your wages (up to 50%), freeze your bank accounts, or put a lien on your property. They can and do intercept tax refunds to cover outstanding balances. The good news: CRA almost always agrees to a payment arrangement if you call proactively. Waiting until they start enforcement is the expensive mistake — set up a payment plan before it gets to that point.
Debt
CRA/Government Powers
Income tax owed
Garnish wages (up to 50%), seize bank accounts, lien on property, intercept tax refunds
Report to bureau, send to collections, sue (then garnish)
Personal loans
Same as credit cards
Lines of credit (unsecured)
Same as credit cards
Medical bills
Send to collections
Buy now pay later
Report to bureau, collections
Key difference: Unsecured creditors must sue you and win a court judgment before they can garnish wages or seize assets. This takes months or years.
How to Triage When You Can’t Pay Everything
The triage framework below works in any financial crisis: job loss, illness, divorce, or simply falling behind. The core principle is that shelter and safety come first, government debts second (because of their enforcement powers), secured debts third (because they can take the collateral), and unsecured debts last. This isn’t about ignoring your credit cards — it’s about making rational decisions when there isn’t enough money for everything. Once you’ve covered the priorities, even small payments to unsecured creditors show good faith and may prevent them from escalating.
Step 1: Calculate Your Essentials Budget
Category
Monthly Amount
Rent / mortgage
$
Utilities
$
Food
$
Essential transportation
$
Child support
$
Medications
$
Total essentials
$
Step 2: Apply the Priority Framework
Order
Action
1
Pay housing costs (rent/mortgage)
2
Pay utilities (especially heat in winter)
3
Pay child support in full
4
Buy essential food and medication
5
Contact CRA to arrange tax payment plan
6
Make secured debt payments (car loan)
7
Pay minimum on unsecured debts if anything remains
8
Seek free help if you can’t cover priorities
Step 3: Contact Creditors Before Missing Payments
Creditor Type
What to Ask For
Landlord
Payment plan for arrears, reduced rent temporarily
Cannot disconnect electricity Nov 15 - Apr 30 for residential
Quebec
Cannot disconnect electricity for low-income Oct 1 - Mar 31
Manitoba
Cannot disconnect gas heating Nov 1 - Apr 30
BC
No specific winter disconnection ban
Alberta
No specific winter disconnection ban
When to Seek Professional Help
If your total debts exceed your annual income, or if you’re already behind on priority debts, free help is available. Credit counsellors can negotiate with creditors on your behalf and set up debt management plans that reduce interest rates. If your situation is more serious, a Licensed Insolvency Trustee can explain whether a consumer proposal or bankruptcy makes sense — the initial consultation is always free. If debt is affecting your mental health, that’s a sign you’ve been carrying this alone too long.
Situation
Recommended Help
Behind on priority debts
Contact creditors immediately, call 211 for local help
Multiple missed payments
Free credit counselling
Debt exceeds annual income
Licensed Insolvency Trustee consultation (free)
Facing eviction
Legal aid, tenant rights organization
CRA garnishing wages
Tax lawyer or LIT
Feeling overwhelmed
Credit counsellor + mental health support
The Bottom Line
Pay the debts that protect your home, your utilities, and your freedom before everything else. Call CRA before they come to you. Contact creditors proactively — most will work with you if you ask before missing a payment, not after. And if you can’t cover even the priority debts, call 211 for local emergency assistance or book a free credit counselling session.