With COVID-19 impacting most of the economy, and with a year of low interest rates, a new survey by Ipsos on behalf of accounting firm MNP revealed that 33% of Ontarians say the pandemic worsened their debt or created a larger debt burden for either themselves or their family (38%).
The MNP Consumer Debt Index also found that 31% of Ontario homeowners report being house poor. In addition, the results noted that 46% will not be able to cover all of their living expenses in the next 12 months.
However, despite the concern, 34% say they plan to spend more than normal on things such as travel, dining, and entertainment as they re-engage with the economy.
“Many appear to be returning to shopping malls, restaurants and airplanes to celebrate the pandemic wind down,” says Caryl Newbery-Mitchell, a Licensed Insolvency Trustee with MNP LTD in Toronto. “Others will try to cope with new debts they accumulated during the pandemic. Even as Ontarians regain employment, the financial damage may linger for years. It is understandable many are seeking post-pandemic indulgences, but the ability to do so is by no means universal. Those who went into lockdown already deeply indebted and then experienced prolonged financial disruption are vulnerable right now. They should not rush to return to pre-pandemic spending habits,” says Newbery-Mitchell.
“As life slowly gets back to normal, the money management behaviours influenced by the pandemic can help households positively reshape their financial futures. Spend less, save more, and make emergency funds a priority,” Newberry says.
The MNP Consumer Debt Index was compiled by Ipsos between June 14-17, 2021 with a sample of 2,002 Canadians aged 18 years and over were interviewed.