Despite rate of interest cuts, Canadians’ financial burden is growing

“Even though interest rates are falling, people are still worried,” said Grant Bazian, president of bankruptcy firm MNP.

The survey, conducted by Ipsos, found that fewer Canadians expect their debt situation to enhance in the approaching 12 months, while a growing number expect it to worsen. More than half say they don’t consider they are going to find a way to cover their entire living expenses and family expenses in the following 12 months without accumulating more debt.

MNP’s Consumer Debt Index, which measures Canadians’ attitudes toward their debt and their ability to pay their bills, fell to its second-lowest level because the survey began in 2017. Meanwhile, Canadians’ personal debt rankings hit an all-time low . A 3rd of respondents said they were insolvent, with women more likely than men to be $200 or less away from bankruptcy.

“I think they just have so much debt and it’s getting harder and harder to service it,” Bazian said.

“Canada is one of the highest Western countries in the world in terms of debt ratio…the volume of debt is catching up with people,” he added.

How is Canada’s unemployment rate trending?

Canadians are also afraid of jobs: two in five respondents worry that somebody of their household could lose their job. Bazian said the number is the very best within the history of this report.

The overall trend in Canada’s unemployment rate has been steadily increasing. Statistics Canada says unemployment remains to be high despite a slight decline in December to six.7%.

Bazian said people’s perceptions of their financial situation are typically based on what is straight away putting them under pressure.