Around two out of five Canadians are also extremely worried about their financial states
Collected data from 2020 reveals some disturbing trends when it comes to Canadians’ finances. Almost half of Canadians have seen their household incomes fall due to COVID-19 shutdowns, while nearly 40% of them have expressed grave concerns about paying their bills.
At of the end of November, TransUnion found that 40% of Canadians living in Ontario and Quebec were worried about their financial status during the pandemic. Meanwhile, 38% of those living in Western Canada and 33% of those in Atlantic Canada showed a similar level of anxiety.
Those worries are only enflamed by the country’s high consumer debt levels. Data shared by Equifax showed that Manitoba had the lowest average provincial debt load at $18,815 per capita, followed by Quebec’s $19,410. The regions with the highest consumer debt loads were Alberta ($29,117), British Columbia ($24,854), and Ontario ($24,032), followed by the four Atlantic provinces.
The trend held strong despite the return to regular employment by millions of Canadians. Figures from StatsCan indicated that household debt as a percentage of disposable income rose to 170.7% before 2020 ended – noticeably higher than the 162.8% level seen during the second quarter.
The household debt service ratio also grew from an average of 12.36% to 13.22% over that same period, recovering from the declines during the first few months of the COVID-19 pandemic. This figure was found to be much higher among Canada’s lower-earning households, a cohort that is estimated to spend around 31% of their incomes on debt repayments.
“We can reasonably expect debt service ratios to rise in the coming months as many households continue to struggle with reduced earnings and debt payment deferral plans offered by financial institutions end,” charity group Prosper Canada said.
