Debt Pinch Tightens Its Grip Across Canada

The collective pressures of increased interest rates, an uptick in consumer debt over the holidays, a stagnating economy and persistently high cost of living are making it difficult for Canadians to repay their debts. And the issue appears to be getting worse. Nearly half of households across the country (and rising) are now $200 or less from financial insolvency at the end of each month – a key warning sign that bankruptcy may soon be on the horizon.

According to MNP’s latest Consumer Debt Index released in January, nearly 30 percent of Canadians fear rising interest rates could push them toward bankruptcy. More than two in five say future increases could significantly impact their ability to repay debts and make ends meet. And close to half expect to take on more debt over the next year just to cover basic living expenses.

If these figures aren’t startling enough, they may only be harbingers of things to come. As future rate hikes make it more expensive to service existing debts – and people continue to accumulate more to make up the difference – the situation could become worse yet.

Canadians across the country have been carrying disproportionately high levels of consumer debt (credit cards, lines of credit, etc.) for years. While this may have been manageable when interest rates were at all-time lows, each successive increase is progressively eating into their bottom lines. With a severe lack of emergency savings to offset unexpected costs such as job loss or illness – and without out a clear path to reduce their overall indebtedness – many are standing on a financial knife edge. It will only take one tip in the wrong direction to trigger a situation they can’t recover from.

Now more than ever, it’s important for people to realize there are resources and solutions to permanently alleviate their ongoing debt-stress and build a better financial future. The sooner they reach out for help, the easier it will be to achieve the fresh start they need and deserve.

Follow the links below for selected national and regional online coverage discussing the Ipsos poll and concern amongst Canadians:

NATIONAL

• https://ca.finance.yahoo.com/news/canadians-may-feel-pinch-bankruptcies-actually-decline-cibc-195540748.html
• https://www.bnnbloomberg.ca/from-trade-tensions-to-pot-talk-bnnbloomberg-ca-s-most-read-stories-of-2018-1.1189060
• https://www.bnnbloomberg.ca/pattie-lovett-reid-morneau-should-be-cautious-in-helping-millennials-buy-homes-1.1204149
• https://globalnews.ca/news/4870779/canadians-financial-insolvency-2019-mnp-ipsos-poll/

B.C.

• https://theprovince.com/personal-finance/debt/business-booms-for-insolvency-trustees-amid-higher-canada-rates/wcm/b740e7e5-aff3-4257-91d2-a104b857c78f
  
• https://www.bclocalnews.com/news/58-of-british-columbians-concerned-about-paying-off-debt-poll-says/
• https://theprovince.com/opinion/letters/letters-to-the-editor-jan-30-2/wcm/89e671a6-3d2f-486e-981e-3b296b7f5049
• https://theprovince.com/personal-finance/debt/business-booms-for-insolvency-trustees-amid-higher-canada-rates/wcm/b740e7e5-aff3-4257-91d2-a104b857c78f

Alberta

• https://edmontonsun.com/news/local-news/nearly-half-albertans-worry-rising-interest-rates-could-lead-to-bankruptcy-poll/wcm/1ad25284-1474-47b1-b74b-3f6460f1e0ee
• https://edmontonsun.com/news/provincial/more-people-on-edge-of-living-paycheque-to-paycheque-survey/wcm/e6cb5b96-4546-4fa7-9cd0-9999c7848025
• https://calgaryherald.com/personal-finance/debt/business-booms-for-insolvency-trustees-amid-higher-canada-rates/wcm/7349bbb5-cd78-4ca6-873f-fa585553a0fb
• https://calgarysbusiness.ca/breaking-news/canadians-lack-financial-literacy-skills/ https://troymedia.com/2018/07/09/increasing-optimism-among-debt-canadians/

Saskatchewan and Manitoba

• https://sasknow.com/article/738175/half-saskatchewan-families-verge-bankruptcy
• https://www.northeastnow.com/article/548036/half-saskatchewan-families-verge-bankruptcy
• http://westcentralcrossroads.ca/2018/10/30/canadians-lack-financial-literacy-skills/ 

Ontario

• https://torontosun.com/opinion/letters/letters-to-the-editor-jan-30-2
•  https://toronto.citynews.ca/2019/01/21/interest-rates-canadians-survey/
•  https://www.thestar.com/business/2018/10/24/rate-hike-adds-to-homebuyers-challenges-could-shut-out-more-first-time-buyers.html
•  https://www.hamiltonnews.com/news-story/8738260-key-steps-to-getting-out-of-credit-card-debt-as-the-cost-of-borrowing-rises/

Quebec

• https://ici.radio-canada.ca/nouvelle/1148234/insolvabilite-financiere-sondage-canadiens
•  https://www.journaldemontreal.com/2019/01/21/pres-de-la-moitie-des-quebecois-sont-a-200--ou-moins-de-linsolvabilite-1
•  https://www.finance-investissement.com/nouvelles/economie-et-recherche/un-canadien-sur-deux-est-a-200-de-linsolvabilite/
•  https://www.tvanouvelles.ca/2019/01/21/pres-de-la-moitie-des-quebecois-sont-a-200--ou-moins-de-linsolvabilite

Atlantic

•  https://www.myyellowknifenow.com/35305/eastern-and-central-canada-blasted-by-winter-storm-more-canadians-cutting-it-close-at-the-end-of-the-month/
• https://www.pressreader.com/canada/the-telegram-st-johns/20180716/281788514834482 http://www.southerngazette.ca/opinion/editorial-house-of-cards-224761/
• http://www.theguardian.pe.ca/business/survey-says-significant-hike-in-household-income-needed-to-pull-many-islanders-out-of-debt-216670/
• http://www.capebretonpost.com/opinion/editorials/editorial-house-of-cards-224761/