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Personal Finance Poll Finds One-Third Of Canadians Can't Cover Their Bills

Charlemagne

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Jul 19, 2017
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01/20/2020 11:56 EST|Updated 01/20/2020 14:27 EST

Personal Finance Poll Finds One-Third Of Canadians Can't Cover Their Bills

Nearly half are on the verge of insolvency, a survey has found.

By Daniel Tencer

MONTREAL ― Three in 10 Canadian households say they can’t cover all their monthly expenses, and fully half are on the verge of insolvency, a new survey has found.

The report from accounting firm MNP Ltd. comes amid warnings from bankruptcy professionals that Canada will see a continued increase in personal bankruptcies and consumer proposals, thanks to rising interest rates over the past several years that are now hitting consumers.

While 29 per cent of survey respondents said they currently can’t cover all their monthly expenses, the number rises to 50 per cent when including everyone who is $200 away at the end of the month from insolvency, up from 46 per cent a year earlier.

“Our findings may point to a shift among some Canadians from debt apathy to debt hopelessness,” MNP president Grant Bazian said in a statement.

“Feelings of hopelessness can make people feel like giving up on ever paying down their debt or, worse, ignoring the debt as it piles up higher.”

The survey asked respondents about their financial expectations one year in the future and five years in the future, and found optimism was at or near record lows for the survey that has been running 11 years.

According to the federal Office of the Superintendent of Bankruptcy, the number of Canadians who filed for bankruptcy or a consumer proposal jumped by 8.9 per cent in the year to November, compared with the same period 12 months earlier.

Saskatchewan (up 19 per cent) and Ontario (up 12.2 per cent) led the increase in insolvencies.

The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) says this is “just the tip of the iceberg” ― it expects more households to run into financial problems as higher interest rates in 2017 and 2018 translate into higher costs for borrowers today.

There likely won’t be much help from the Bank of Canada for borrowers this year. The bank announces its latest interest rate decision Wednesday, and analysts expect it to stand pat.

With recent data showing Canada’s economy strengthening going into 2020, fewer investors are betting the Bank of Canada will cut interest rates this year.

The country’s strong economy and relatively strong inflation mean that ― despite rates being low by historical standards ― Canadians are facing some of the highest borrowing costs in the developed world today.

https://m.huffingtonpost.ca/entry/debt-insolvency-canada_ca_5e25d1efc5b63211761787b5
 

onthebottom

Never Been Justly Banned
Jan 10, 2002
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Canada’s overnight rate and inflation are within 50 BP, this means zero real rates. If a third of Canadians can’t make it now they will never be able to make it.
 

bver_hunter

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Nov 5, 2005
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No different in the USA for now. Thanks to stupid trade tariffs and very high inflated property prices and rents. In other words the rich will always get richer, unless actual reforms occur based on Swedish and other Scandinavian models!!
 

bver_hunter

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Nov 5, 2005
27,340
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Raising the minimum wage would be a start.
Sorry you've got the wujan thingy.
But then the right wingers went ballistic about raising the minimum wage to $15 an hour and were jumping from joy when Dumb DOFO cancelled it. Yet they claim that it is a Socialist policy to implement a "high" minimum wage We argued that those on minimum wages cannot make ends meet whether it is under Conservative or Liberal Governments. They did not care about the well being of those that come under that bracket. Especially, when they were pissed off when the Government intervened to curtail the sharp increases in rents etc. Now suddenly they are concerned. What explanation do they have for those in the very low income brackets working at places like Starbucks and Tim Hortons when it pisses them off, if their coffee prices are raised by a few cents if they get raises in their pittance of wages??
 
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