Nearly Half (46%) of Canadians’ Work Situations Still Affected by Pandemic

What Canadians plan to do when CERB runs out:

 -  Nearly half say they will cut back on consumer spending (46%)
 -  One third will apply for employment insurance (EI) benefits (32%) or take  on more debt (35%)
 - One in 10 will use savings to pay bills (30%)

CALGARY, AB – June 22, 2020  – As the Canadian economy begins to re-open after being shuttered for months due to COVID-19, nearly half of Canadians’ (46%) work situations are still affected by the pandemic. A recent poll by Ipsos carried out on behalf of MNP LTD has found almost two in 10 are either working reduced hours or receiving reduced pay (17%) or have lost their job (16%). In addition, many say someone in their household has lost their job (14%) or is working reduced hours or receiving reduced pay (9%).

The survey also looked at what Canadians plan to do when emergency benefits offered during the coronavirus pandemic run out. Many currently receiving COVID-19-related government financial support say they will have to simply cut back any way they can when the assistance ends (46%). A third say they will apply for EI (32%), followed by using their savings to pay bills (30%).

“Those in need have certainly welcomed the federal government’s life raft of COVID-19 aid programs, recently extended into mid-July. However, while various relief measures are providing some much-needed breathing room for many Canadians, their underlying financial problems have not gone away,” says Grant Bazian, President at MNP LTD, the country’s largest insolvency firm.

Thirty-five percent of those surveyed said they plan to borrow more when COVID-related government financial support ends. That includes using credit cards (17%), borrowing from friends or family (16%), using a line of credit to pay bills (12%), taking a bank loan (7%), or using a payday loan service (4%).

“Even if it is generally responsible borrowing and interest rates remain low, it’s easy to get deeper in debt without realizing how difficult it is to get out.  We’re going to see the greatest amount of pain when the debts come due, deferred payments resume, and collection activity returns to normal,” says Bazian who warns that Canadians who borrow to make ends meet may be unwittingly be pushing themselves into an endless cycle of debt.

Consumer insolvencies are expected to spike in the wake of the pandemic as many Canadians were already feeling a tremendous strain on their pocketbooks. One in 10 (7%) survey respondents said they plan to file a Consumer Proposal or declare Bankruptcy (6%) after government financial support ends.

“Job loss is the biggest catalysts for insolvency, so it’s likely those who were already severely indebted and living paycheque to paycheque will have to look at debt relief options. The best thing people in this situation can do right now is to get professional debt advice,” he says.

Government-regulated Licensed Insolvency Trustees are empowered to help Canadians reorganize their financial affairs 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.

When it comes to the longer-term effects of the pandemic, many are increasingly concerned. A third (34%) say they are worried about the economic fallout from COVID-19, a whopping 17-point increase from March. They are also worried about the current state of the Canadian economy (29%, +7), and the chances of a recession (25%, +6).

Despite high unemployment and concern about the lasting effects the virus will have on the economy, some Canadians are feeling slightly better about their personal financial situations. This is likely due in part to government support helping some families stay afloat. Compared to levels measured just before the pandemic, Canadians are less worried about how they will pay their bills (22%, -8), their level of debt (21%, -8), and affording necessities for their family (19%, -6).

Other Survey Highlights:

• Younger Canadians are more likely to say their work situation has been affected by the pandemic, given that they are the most likely to be in junior positions or working the service industry. A quarter (24%) of those aged 18-34 years say they have lost their job (24%) or are working reduced hours / pay (24%).
• Those aged 55+ are the most likely to say that they haven’t seen any change to their work situation due to COVID-19. This is understandable, given that many of them may already be out of the labour market.

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. 

In light of the social distancing measures currently in place, MNP LTD is currently offering free consultations via videoconferencing (Skype, Messenger, Zoom, FaceTime, etc.) and by phone. Their team of Licensed Insolvency Trustees are empowered to help those struggling financially to make the most informed choices to deal with their debt during this time.

Visit MNPdebt.ca to book an appointment or to start a live chat.

About the Survey

These are some of the findings of an Ipsos poll conducted between June 1-2, 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 provincial data is available by request.