Four out of 10 Canadians are financially stressed: President of National Payroll Institute
New survey results suggest the financial stress of Canadians has climbed drastically from a year ago, hitting an all-time high for the annual study.
The Annual Survey of Working Canadians from the National Payroll Institute, published Tuesday, found 37 per cent of Canadians fall into the “financially stressed” category, a 20-per-cent jump in the last year.
Peter Tzanetakis, president of the National Payroll Institute, said the figures represent the highest levels of financial stress in the 15 years of the survey.
“There’s a financial stress storm that’s really picked up this year, and it really started in 2021 after the initial lockdowns of the pandemic actually improved financial situations for most Canadians,” Tzanetakis told BNN Bloomberg in an interview on Tuesday.
“Right now, what we’re seeing is a significant increase in those who are financially stressed and it is the highest we’ve seen.”
Among those deemed financially stressed, 63 per cent said they are living paycheque to paycheque, while 50 per cent felt overwhelmed by debt.
Tzanetakis said high interest rates and inflation are playing a role in the financial stress of Canadians, but growing debt is the main issue.
“Working Canadians are using debt to finance essentials, such as food and accommodation, and this has really created a situation which is starting to spiral,” he said.
Equifax Canada recently reported that Canadian consumer debt reached $2.4 trillion, as credit card debt hit an all-time high of $107.4 billion.
WHAT CAN CANADIANS DO?
Tzanetakis said financially stressed Canadians must work on reducing debt levels to ease the crunch on their accounts.
“It’s tough to tell Canadians that they shouldn’t be spending on essentials, I think the cost of essentials has really gone up, but they’re going to have to make some hard choices when it comes to discretionary spending,” he said.
“One of the things that they can definitely focus in on is debt, incurring more debt to finance the household is not a great idea, especially given the debt levels we’re seeing of working Canadians.”
Tzanetakis added consolidating debt is a good way to get things under control and often comes with a cheaper interest rate.
The 15th Annual National Payroll Institute Survey of Working Canadians: An online survey of 1,500 working Canadians (81 percent of whom are full-time employees) was completed between July 21, 2023, and August 1, 2023, using Framework Analytics' online panel. The panel is continually tested to ensure validity by comparing survey results to what has been measured in censuses, household studies conducted by statistical agencies and other reliable data sources. The survey is consistent with a margin of error of plus or minus 2.5% 19 times out of 20, but as a non-probabilistic methodology was used, a definitive margin of error cannot be expressed. The data was weighted to be representative.