Yet another survey has found that Canadians are overburdened with debt and on the brink of financial insolvency.
The number of Canadians who are $200 or less away from financial insolvency every month has reached 48% (nearly half), up from 46% in the previous quarter, according to a new poll by Ipsos for insolvency firm MNP Ltd. The latest poll found that 35% of Canadians say an interest rate increase would move them towards bankruptcy, while 54% said they worry about their ability to repay debts.
"Canadians appear to be maxed out with no real plan for paying back what they have borrowed," said MNP President Grant Bazian in a written news release. "This raises many alarming questions about how and if consumer debt will be repaid."
The Bank of Canada raised its benchmark lending rate three times last year, taking it to 1.75% in October, but has since held rates steady. The central bank will announce its next interest rate decision this Wednesday. The consensus forecast is for the Bank of Canada to continue holding interest rates at their current levels.
Ipsos surveyed 2,070 Canadians online from March 13-24. According to the survey, insolvency concerns rose the most in Atlantic Canada, with 55% of people saying they are $200 or less away from the financial brink, a jump of 10 percentage points since MNP’s December survey. Quebec residents were second at 51%, up five percentage points, followed by Ontarians at 48%, up two points.
Despite the current situation, many Canadians continue to add to their debt loads. The MNP survey found that about four in 10 respondents said they won’t be able to cover all living and family expenses in the next 12 months without taking on more debt.
