The number of Canadians concerned about making ends meet is at the highest it’s been in three years. Nearly half are concerned they can’t cover living expenses on their own this year.
A new consumer debt index by the insolvency trustee MNP Ltd indicates that nearly half of Canadians are not confident they’ll be able to cover living and family expenses over the next twelve months, without spending on credit. The same report shows the proportion of Canadians who report being insolvent, or unable to pay their monthly bills and debt repayments sits at the highest level recorded since the index was first created in 2017. Half of those surveyed say they’re more concerned about their ability to repay their debts than they used to be.
Despite these concerns, MNP says about one-third say they plan to spend more than they normally would as the economy reopens, on things such as travel, dining and entertainment. “A significant proportion of Canadians appear to be ready to emerge from their bubbles and go straight into shopping malls, restaurants and airplanes to celebrate the pandemic wind down,” says Grant Bazian, president of MNP Ltd. “For many, the financial damage will likely linger for years even as they regain employment and try to cope with new debts they may have accumulated.”
The same index shows that three in ten Canadians feel the pandemic worsened their debt or created more debt and that of those, about 60 per cent say they took advantage of low-interest rates brought about during the pandemic. This was used to make purchases that many would not normally have fit into a budget.
While the majority of respondents, at 65 per cent, report they reduced their spending during the pandemic, how much was by choice and how much was due to necessity remains to be seen.
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