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COVID-19 is pushing personal finances deeper into the red for many Canadians

Last Updated Dec 2, 2020 at 7:28 am PDT

(Source: iStock)
Summary

Close to two-thirds of Canadians are carrying debt other than a mortgage amid COVID-19 pandemic, report finds

Credit Counselling Society says almost half of Canadians surveyed say they have a month or less in emergency savings

Credit Counselling Society is encouraging people to reach out for help with debt

VANCOUVER (NEWS 1130) – Debt is keeping many Canadians up at night with the COVID-19 pandemic pushing personal finances to the brink for many.

A report from the non-profit Credit Counselling Society finds close to two-thirds of Canadians are currently carrying debt other than a mortgage, with almost half surveyed saying they have a month or less of emergency savings.

Almost one-third of respondents say they are struggling to make even minimum payments on what they owe, with younger people disproportionately impacted by the pandemic, including those in lower income brackets and those who have experienced changes in their employment due to the fallout from COVID-19.

“When it comes to money stress, there is help out there,” says Stacy Yanchuk-Oleksi with the Credit Counselling Society. “What Canadians need to be aware of, though, is that not all ‘help’ helps.”

She advises people to do their research, recommending people connect with their local, non-profit credit counselling agency. “They are accredited, they are licensed, and they provide free help, which is confidential.”

Reaching out for help

That confidentiality is key for many who struggle with the stigma around openly talking about finances.

“There is a tremendous amount of shame when it comes to money,” Yanchuk-Oleksi tells NEWS 1130. “I’ve felt it and I’m sure lots of your readers have felt it as well. What we need to do is take a deep breath and realize that if you were not taught how to manage your money, how would you do so?”

She encourages people to reach out the moment they start to feel stressed about their finances.

“Just speak with your local, non-profit credit counsellor. There is no impact on your credit, there’s no impact on anything other than you’re going to get a better night’s sleep, you’ll have more information, and you’ll walk away with a plan.”

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The report finds a quarter of Canadians with non-mortgage debt have leveraged government supports, tapped into personal savings, or both during the COVID-19 pandemic, which may have helped in the early months of the health crisis. However, many people are now facing a financial crunch.

“What we noticed at the beginning is that the number of people reaching out dropped significantly. I think people were waiting to see what was going to happen and then we were lucky enough to be supported by our federal government with the CERB program, as well as with creditors deferring products,” she says.

“Canadians had a bit of breathing room for some time. Now that CERB has wrapped up and creditors are starting to want payment, we are starting to see the reaching out for help increase. We figure in January it will go up even more.”

The Credit Counselling Society says it has been supporting Canadians with debt management strategies for over two decades but, pointing to this report, it “can confidently confirm that it’s never been more important to proactively tackle your debt than it is right now.”