According to the MNP Consumer Debt index – 54% of Canadians are within just $200 of financial insolvency. The blog from MNP says that “As pandemic-related government aid and loan deferral programs begin to wind down, the latest MNP Consumer Debt Index finds the number of Ontarians hovering close to financial insolvency has reached a five-year high.”
The survey noted a “whopping 13-point jump from December.” It also points out that “compared to the other provinces, Ontarians are the most likely (32%, +10pts) to report they are already insolvent with no money left to cover their payments at month-end.”
Caryl Newbery-Mitchell, a Licensed Insolvency Trustee with MNP LTD in Toronto says that “Financial relief measures provided some breathing room over the last year, but now we’re seeing a rapid reversal.”
“Significantly more in the province are experiencing anxiety about making ends meet — or already being unable to do so.” Ipsos also reports that on average, Ontarians say they are left with $692 after making their payments – down $148 or 18 percent from December. This could be a reflection of government aid programs, evictions bans and payment deferrals coming to an end.
Many Ontarians are facing the same bills coming due – but with income not equivalent to the pre-pandemic levels they’re accustomed to. More than a quarter (27%) of Ontarians have taken on more debt during the pandemic as well. Nearly one in five (16%) also report having to dig into their saving to pay for household bills as a result of the government’s draconian approach to Covid.
More than half of those surveyed are concerned about their ability to repay debts if interest rates rise, including one approximately one in three (34%) who worry that rising interest rates could send them towards bankruptcy.
Perhaps a symptom of lockdown boredom and not a representation of sound fiscal planning – more than half of those surveyed (56%) believe now is a good time to buy things that they otherwise couldn’t afford. Additionally, more than half of those surveyed (46%) say that they’re more relaxed about carrying debt than usual – up slightly from December.
What is perhaps the most concerning finding of the survey is that three in ten of those surveyed (30%) say they plan to take on more debt to pay bills over the next year – including using high-interest options like credit cards (8%) or payday loan services (3%).
Canadians can’t take any more lockdowns – the future health of our nation is at stake here. Businesses are getting hammered and can’t afford to shut their doors any longer. Unless Canadians can seriously reduce their bills are find a way to earn more income – rough waters are ahead. How about we end the lockdown and stop the Titanic before it hits the iceberg Canada?
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