One of the most pressing federal election issues this year was housing affordability. This makes sense given the average rent in Toronto has reached an all-time high of $2,515 per month (which doesn’t include utilities nor parking). That’s a 30 per cent increase from three years previous.
Now, the MNP Depbt Index, carried out by Ipsos, confirms what might already seem obvious — nearly half of Canadians are struggling to make ends meet. To be precise, 48 per cent of Canadians are $200 or less away from financial insolvency, meaning they’re unable to pay their rent or bills.
Our latest MNP Consumer Debt Index says that Canadians find themselves with less money each month, more than half concerned about their ability to repay debts. #MNPcdi
— MNP 310-DEBT (@MNPdebt) October 28, 2019
Sadly, it gets worse. Forty-seven per cent of survey respondents say they don’t anticipate they’ll be able to cover their cost of living in the next year without accruing more debt. More than 70 per cent of people surveyed say that just one major life obstacle — be it unemployment, tuition or the loss of a loved one — could stop them from fulfilling their financial obligations.
On top of all this, of the 2,002 Canadians surveyed, 30 per cent were already in a position as of September where they cannot cover their minimum debt payments.
Last week, the Bank of Canada announced it would be keeping interest rates steady until next year. For those making debt payments at the current rate, it’s understandable that many are worried that an increase could affect their ability to cover future ones. With the future of interest rates hazy, eight out of ten survey respondents say they plan to be extra careful with their finances over the next few months.
The MNP Debt Index survey was last conducted in June 2019. Since then, in a single quarter of the year, the amount that Canadians have left over each month after their bills are paid has decreased by $142 to $557.
Overall, Canadians are “still generally positive about their personal financial situations.” In fact, 40 per cent of people surveyed would describe their debt situations as “excellent” and are hopeful about their financial futures over the next five years. Canadians are also confident about taking on debt which can pay off later in life, such as buying a home, necessary auto repairs and funding their educations.
“No one knows what the future holds for them and it seems that while Canadians may seem generally hopeful that their financial future will be better than the present, there are cracks around the edges that could lead to a bigger problem if left unaddressed,” stated the press release.
So, what happens next remains to be seen.