How do Canadians plan to come back from COVID-19 setbacks?

National survey reveals how continuing financial shortfalls prompt consumers to consider tradeoffs and sacrifices

How do Canadians plan to come back from COVID-19 setbacks?

While the latest economic snapshot from Statistics Canada showed an increase in household wealth, that came on the back of a rise in stock and property markets. That leaves a large swath of the population with a substantial liquidity problem – and, as a new survey shows, a long road to walk toward resolving their debts.

In a poll of Canadian consumers conducted by TransUnion on November 30, 50% said their household has sustained a negative impact from the COVID-19 pandemic. Among those who said they weren’t impacted, 53% said they don’t expect to be in the future. Half of the households surveyed said their income was still negatively impacted by COVID-19, with Gen-Z respondents reporting the greatest impact (67%). Of those who said they weren’t impacted, just 17% felt they might be in the future.

Nearly two thirds of impacted respondents said they can continue to pay their bills and loans for at least a month longer, though 39% said their household finances were in worse shape than they’d planned. Many are struggling to make ends meet, with respondents saying they would be short on by an average of $875 a month.

When asked which bills and loans they were most concerned about paying, 51% of all respondents cited credit-card debt; that number decreased to 37% among Gen-Z respondents. Other ongoing obligations identified by respondents included mobile phone bills (cited by 30% of all respondents), utilities (27% overall), internet (26%), rent (25%), mortgage payments (22%), and insurance (21%).

As for the loans or bills that they enrolled in financial accommodation programs, 35% of respondents indicated business loans; 15% asked for relief on student loans; and one tenth said they asked for accommodation on mortgages (11%), auto leases (10%); and personal loans (10%).

Among the current tactics used by everyday Canadians to help meet their outstanding and ongoing obligations, 60% said they’ve had to cut back on discretionary expenses in their household budget; 30% said they are saving less for retirement; and 28% said they’ve cancelled subscriptions or memberships.

Moving forward, one third (32%) said they’d make partial payments on their debts. Nearly three tenths (28%) said they’d withdraw from their savings and investments, a strategy that showed outsized adoption among older generations. Almost the same percentage (27%) said they’d borrow from family and friends, with Gen Z and Millennial respondents being more likely to say they’d do so. Concerningly, 15% said they don’t know they will make their payments.

Over half (53%) of Canadian consumers said they’d put off going on vacation. Respondents also cited delaying other major purchases such as home improvements (23%), auto purchases (18%), and home purchases (12%).


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