More than half (56%) of British Columbians still experiencing COVID-related disruption to their employment – the highest proportion nationally

Indebted British Columbians urged to seek professional debt advice before borrowing more to make ends meet

VANCOUVER, BC – September 16, 2020 – A new poll by Ipsos carried out on behalf of MNP LTD has found more than half (56%) of British Columbians 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. This represents an increase of five points since June and the highest proportion compared to the other provinces. Over the past few months, various financial relief measures from the government, banks, and businesses have helped cushion the financial blow of the pandemic for many B.C. households. However, as these measures evolve or come to an end, the pandemic is still impacting household income for many.

“British Columbians are more likely than any other province to say they are still experiencing COVID-related disruption to their employment. And yet, while household finances are still being disrupted, short-term financial relief will soon be ending. Creditors will begin chasing after deferred payments and this will only compound their debt problems,” says Linda Paul, a Vancouver-based Licensed Insolvency Trustee with MNP LTD.

Compared to the other provinces, British Columbians are the most likely (27%) to say they are currently working reduced hours or receiving reduced pay (+3 from June), while one in 10 (11%) say someone in their household is experiencing the same situation (unchanged).

“We haven’t seen evidence yet confirming British Columbians have piled on considerably large amounts of debt since March. However, we do believe some will have no choice but to rely on credit to get by once government support is phased out,” explains Paul. “It becomes very difficult to break the cycle once you start borrowing against future paychecks because you are leaving a hole in your next paycheck each time you borrow.”

About one in 10 (8%) British Columbians say they’ve had to postpone payments on bills, credit cards, and taxes. This translates to about 410,000 people.

“For those who are deep in debt and now missing payments, seek professional debt advice before you start borrowing more to make ends meet,” says Paul. She and her team offer free consultations via videoconferencing and by phone to anyone experiencing debt-related financial challenges. 

Paul says historic low-interest rates may be giving some a false sense of security that will result in increased borrowing. Those who are most vulnerable may turn to high-interest credit.

Nationally, 45 percent of Canadians who are currently receiving COVID-19-related government financial support say they will take on more debt in one form or another when that ends — an increase of 10 points since June. Two in 10 say they will use their line of credit (18%, +6) or borrow from friends and family (19%, +3). One in 10 (11%, +4) say they will take out a bank loan. Two in 10 (21%, +4) Canadians will use their credit cards to make ends meet when relief measures end. About one in 10 (8%, +4) say they will use a payday loan service.

“We are likely going to see fixed-income and lower-income renter households experiencing very significant setbacks for many years to come if they start taking on high-interest loans to make ends meet,” says Paul. “Meanwhile, B.C. homeowners will also face tough financial decisions if they were overleveraged before the pandemic.”

Two in 10 (21%) Canadian homeowners say they will be forced to defer their mortgage payments, and 16 percent say they would have to sell their home to make ends meet once COVID-19-related support ends.

“There has been a great deal of uncertainty caused by the pandemic, but one thing is clear: British Columbians’ underlying debt issues have not disappeared. The pandemic has simply allowed them to delay the need to deal with their issues,” explains Paul.

She points to the fact insolvencies are down significantly compared to last year as a result of pandemic-related financial support. The latest statistics from the Office of Superintendent of Bankruptcy show B.C.insolvencies were down 38.2 percent in July compared to the same month last year and 7.4 percent for the 12-month period ending July 31, 2020.

Once COVID-related benefits end, insolvencies are expected to increase significantly. According to the survey, about one in 10 (11%, +5) Canadians currently receiving benefits indicate they will declare Bankruptcy if the financial support ends. Around the same number (10%, +3) say they will file a Consumer Proposal to address their debt.

“While filing a Consumer Proposal or Bankruptcy might be the right choice for some, there is a range of debt relief options a Licensed Insolvency Trustee can help people choose from. They will work with the individual to find the best option for their situation, which could simply mean helping them develop a customized plan to deal with their debt,” says Paul.

Government-regulated Licensed Insolvency Trustees provide advice to Canadians struggling financially and, where appropriate, can even help them avoid Bankruptcy by facilitating an agreement with their creditors. They can also guarantee legal protection from creditors through the Consumer Proposal or bankruptcy process.

“There is no reason to face debt alone. Professional help is available to get indebted British Columbians back on the right track,” she says.

Those in need of debt advice can visit MNPdebt.ca to book an appointment or to start a live chat.

Other survey highlights include:

• Nationwide, about one in 10 (7%) say they’ve had to postpone payments on bills, credit cards, and taxes, translating to about two million Canadians. This proportion reaches 11 percent among those who rent their home. Among those who own their home, 5 percent say they’ve had to defer their mortgage payments.
• Other plans for when COVID-19-related government financial support ends:
  • Nearly half (45%, -1) of Canadians say they will likely have to cut back on consumer spending and expenses.
  • Three in 10 (31%, +1) say they will use their savings to pay their bills.
  • Fifteen percent (15%, +2) say they will sell assets like their car, investments or rental property.

About MNP LTD

MNP LTD, a division of the national accounting firm MNP LLP, is the largest insolvency practice in Canada. For more than 50 years, our experienced team of Licensed Insolvency Trustees and advisors have been working with individuals to help them recover from times of financial distress and regain control of their finances. With more than 230 offices from coast-to-coast, MNP helps thousands of Canadians each year who are struggling with an overwhelming amount of debt. Visit MNPdebt.ca to contact a Licensed Insolvency Trustee or use our free Do it Yourself (DIY) debt assessment tools. 

About the Survey

These are some of the findings of an Ipsos poll conducted between September 1-3, 2020 on behalf of MNP LTD. For this survey, a sample of 2,001 Canadians aged 18 years and over was interviewed. Weighting was then employed to balance demographics to ensure that the sample’s composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to, coverage error and measurement error.

A summary of the national data is available by request.