Columnist image
Pattie Lovett-Reid

Chief Financial Commentator, CTV


Sign up for BNN Bloomberg's new weekly newsletter, Home Economics, here:

The pandemic is taking its toll on Canadian households, according to Manulife Bank's Debt Survey. The results released Tuesday highlight mounting debt, diminished dreams of homeownership, and mental health issues.

The pandemic hit with a vengeance, and some households were better able to withstand the financial shock than others. Thirty-five per cent surveyed admitted they were unprepared for the pandemic, while nearly three-quarters (74 per cent) said their financial situation has been impacted.

And for two-thirds of Canadians surveyed, COVID-19 may have pushed the dream of homeownership out of reach.

It is becoming more of a tale of two realities: the rich are getting richer and the poor are getting poorer. This scenario is referred to as the K-shaped recovery. 

Those who have managed to continue to work from home and maintain their salaries find they are saving – a lot. Leisure travel and entertainment have evaporated and dining out has become a thing of the past for now. Money that was once considered to be disposable for discretionary items has morphed into savings and, in many cases, investments. 

It’s easy to see how the rich can save and invest more. And with a return on investment typically higher than the growth of wages, the rich continue to get richer. Add to this, the rich often have a greater tolerance to withstand financial shocks and can even afford to take on more risks. 

For those who have lost their jobs due to the pandemic, the survey found one-quarter are struggling to pay their bills. One-in-six have been laid off with as many saying they too would have been laid off if it had not been for the federal government’s wage subsidy program. The poor are getting poorer. 

Canadians under the age of 40 from lower income families have been hardest hit and are having the most difficulty paying their bills, according to Manulife.

Add to that, indebted Canadians were far more likely to say their debt load is causing them stress (53 per cent) or keeping them up at night (35 per cent).

The unknown, lack of financial security and competing priorities for limited financial resources has many overwhelmed and financially stuck. But it doesn't have to be all bad news.

Here are three tips to consider:

1. Acknowledge where you are today and know that financial goals can change when life gets in the way. Your dream of owning a home might have been a short-term goal and may now have to become a medium or longer-term goal. But it doesn't mean you have abandon your dream all together. 

2. Identify what matters most to you. Not everything can be a 10/10, so prioritize your action plan accordingly. Some things may have to be pushed further out and that is okay. 

3. Recognize that getting through a financial shock such a pandemic is a massive accomplishment. And don't underestimate your financial survival skills. You may still come to realized you have a lot more financial resilience then you thought.​