A new survey’s results released on Thursday indicate that the Canadian consumer debt index is at a five-year high, with 53 percent of them being $200 or less away from not being able to meet basic monthly expenses.
Perhaps even more alarmingly, that 53 percent number includes 30 percent of people surveyed who are already unable to pay their expenses on their own.
According to Bloomberg, around 25 percent of Canadians have gotten into more debt during the pandemic. 20 percent of those surveyed said they had to use savings for basic expenses, and 14 percent used credit cards.
Grant Bazian, the president of MNP Ltd., said in a statement:
“The anxiety Canadians are feeling about making ends meet – or already unable to do so – tells us we may eventually see an avalanche of households falling behind on payments or defaulting on loans, mortgages, car payments or credit cards.”
“Those taking on more debt are becoming increasingly vulnerable to interest rate increases in the future. They might find that their debt becomes unaffordable when that happens.”
Many of these people surveyed have taken on debt simply because they have lost work and/or benefits, or in some cases are struggling not to shutter their small businesses.
All of this is despite unprecedented and possibly unsustainable government spending in the past twelve months.