52 Per Cent of Canadians Are $200 or Less Away from Missing A Bill Payment
A recent report conducted by insolvency firm MNP Ltd. reveals that a growing number of Canadians are facing financial distress, with 52 percent stating that they are only $200 or less away from being unable to meet all their monthly financial obligations. This figure has increased by six percentage points since April, indicating a worsening situation. The rising cost of living and higher interest rates have placed significant strain on household budgets across the country.
Grant Bazian, the president of MNP, highlights the mounting pressure Canadians are experiencing due to escalating household bills and food prices. Additionally, the increased costs of servicing debts, especially for those who are already heavily indebted, have further compounded the financial anxiety felt by individuals. These factors have contributed to a decline in MNP’s consumer debt index, dropping from 89 points in April to 83 points in the latest reading. This decline reflects a more pessimistic outlook on personal finances and debt among Canadians.
According to the report, 35 percent of respondents admitted that their income is currently insufficient to cover both their bills and debt payments. This represents a notable increase from the 30 percent reported in April and establishes a new record high for this survey. The report also highlights that a record-breaking 48 percent of participants expressed concerns about their existing levels of debt, emphasizing the growing unease surrounding personal financial stability.
The Bank of Canada has identified household debt as a significant risk to the overall economy. With this in mind, the central bank is set to announce its next interest rate decision on Wednesday, as it seeks to address the challenges arising from the current financial landscape. This report underscores the urgent need for measures to alleviate the strain faced by Canadian households, as the issue of mounting debt remains a pressing concern.