More Canadians living paycheque to paycheque with growing debt

Personal finances of millions of Canadians are worsening, and more people are concerned about their high levels of debt

More Canadians living paycheque to paycheque with growing debt
Steve Randall

More than half of Canadians (54%) say they are now living paycheque to paycheque as the cost-of-living crisis continues to squeeze budgets.

That’s a three-percentage-point rise from last year according to the BDO Canada Affordability Index, which also reveals that almost eight in ten respondents report that their finances are worse in 2022 than in 2021.

Paying for essentials is becoming harder with the share of people who say they have enough money for this part of their budget down from 70% to 66% in a year.

Meanwhile, debt is a concern with 82% reporting that their levels of debt has increased, up 14 points from last year, while 42% say that their debt has become “overwhelming” – that’s almost double the 2021 level.

Saving and spending

Inflation means that there is less money available to save for emergencies, large purchases, and retirement. Six in ten respondents are saving less than they were in 2021, or not saving at all.

More than two thirds of younger Canadians (age 18-24) say they have no retirement savings at all and 32% of all respondents say they have no idea what their retirement plan will be. For one third, they believe they will never stop working (through part-time/occasional work), despite wanting to retire.

Discretionary spending has also taken a hit with 61% having cut spending on restaurants/take-out, along with travel (60%) and home electronics (53%).

The poll was conducted for BDO Canada by Angus Reid Forum and included a randomized sample of 2008 Canadian adults.