A new poll suggests the majority of Canadian adults are less than $200 away from financial insolvency.
According to the MNP Consumer Debt Index published on Thursday, 53% of Canadians are $200 or less away from missing their bill payments, a 10% jump since December and a five-year high.
“Pandemic-related financial relief measures provided some breathing room over the last year, but now we’re seeing a reversal,” said MNP President Grant Bazian.
“The number of Canadians with virtually no wiggle room in their household budgets has reached a five-year high. The anxiety Canadians are feeling about making ends meet — or already being unable to do so — tells us we may see an avalanche of households falling behind on payments or defaulting on loans, mortgages, car payments, or credit cards.”
MNP found Canadian households are finding it difficult to make ends meet as government pandemic benefits end. Those surveyed reported the money left over after paying their bills has decreased by 15% since December.
During the first months of the pandemic, unemployment in Canada reached unprecedented highs, with government programs replacing employment incomes for millions of Canadians. As pandemic programs end, many Canadians still do not have good jobs to return too.
MNP says 14% of Canadians surveyed used credit card debt to make ends meet during the pandemic.
“Even though some Canadians are spending less and saving more as a result of pandemic measures, others are being pushed further into the red, taking on more debt to stay afloat after job, wage, or small business loss,” Bazian said.