Survey shows two-in-five Canadians could be left with their heads in the sand when financial supports run out

BY MICHAEL THOMAS

Credit Canada did a recent survey and the result revealed that the lockdowns have left many Canadians losing the race when it comes to their financial future. This will be truthfully sobering especially when government support and payment deferrals finally come to an end.

The Angus Reid study of 1,500 Canadians, sponsored by the non-profit credit counselling agency Credit Canada, found that of those Canadians receiving assistance, (39%) have no idea what they’ll do when the support runs out. This number balloons to 49% in the Atlantic and drops to 36% in Quebec. Additionally, this uncertainty is most prevalent among those aged 35-54 (44%) and levels out to 36% with both the 18-34 and the 55+ age cohorts.

In general, one-in-four Canadians (24%) have used income supports (government assistance, CERB, EI, etc.) and (9%) have used payment deferrals (car, mortgage, rent, lines of credit, credit cards etc.) due to the present situation.

One-in-ten said they would turn to traditional borrowing such as family loans, bank loans, and credit cards. On the positive side of the ledger, only 2% will resort to payday loans or short-term lenders who are famous for charging the highest rates and through the roof fees.

What is hopeful and also encouraging in all this is that half (49%) of those receiving income supports or using payment deferrals are confident they’ll no longer need financial help at all once these supports have ended.

Strangely just 2% of those receiving financial help said that they would seek professional help (bankruptcy/insolvency, credit counselling, etc.)

Even though consumer insolvencies have seen a falling trend in recent months and the household debt-to-income ratio also fell in the second quarter; these figures are artificially blown-up by income supports. Canadians have had a false sense of security and a slew of insolvencies could come later this year.

“For those without a debt management plan, now is the time to put one in place,” said Keith Emery, Co-CEO of Credit Canada. “When government supports and payment deferrals come to a complete halt, the financial counselling network will reach beyond its critical mass if everyone waits until the last minute to get help.”

Starting this November (Financial Literacy Month) Credit Canada is dedicating itself to a year-round effort to elevate credit education while ensuring Canadians have access to free resources all year round.

Credit Canada is a not-for-profit credit-counselling agency providing free and confidential: debt and credit counselling, personal debt management, debt consolidation and resolutions since 1966.

To learn more about Credit Canada and for more information on this matter please visit www.creditcanada.com.