Financial challenges for Canadians during COVID pandemic

“Even in good times, many household budgets teeter on a knife-edge. We know that many don’t have enough emergency savings to cope."

A new poll finds 43 per cent of Canadians are still experiencing disruption to either their own work situation or that of someone else in their household in the form of lay-offs, reduced pay, or fewer working hours.

The poll, released on Wednesday, was conducted by Ipsos for MNP.

“Short-term financial relief is ending, but household finances are still disrupted. And on top of that, creditors will soon be looking for ways to catch people up on deferred payments. While jobs have slowly begun returning across the country, that does not necessarily mean relief for all working Canadians,” said Grant Bazian, President at MNP, the country’s largest insolvency firm.

“Even in good times, many household budgets teeter on a knife-edge. We know that many don’t have enough emergency savings to cope. And though we’ve yet to see any concrete evidence Canadians have significantly increased their debt loads since March, there’s reason to think many will turn to credit when relief measures end.”

The poll also found:

  • 15 per cent of Canadians say they are currently working reduced hours or receiving reduced pay with another nine per cent saying that someone in their household is experiencing the same situation;
  •  Among those currently receiving COVID-19-related financial support from the government, 45 per cent say they will take on more debt in some form or another when that ends. Two in 10 say they will use their line of credit (18 per cent) or borrow from friends and family (19 per cent). 11 per cent say they will take out a bank loan;
  • 21 per centCanadians will use their credit cards to make ends meet when relief measures end. 8 per centsay they will use a payday loan service.

“Amidst all the uncertainty the pandemic has caused, one thing is certain: the underlying debt problems faced by Canadians have not gone away. For the most financially vulnerable, the pandemic will likely thicken the debt quicksand they were previously trapped in,” said Bazian.

 

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