Canadians continue to be anxious about inflation and rising costs of living, despite household debt easing slightly by the second quarter of the year.
According to fresh data from the Credit Counselling Society, the Canadian household debt ratio shrunk to 177.1% of disposable income during Q2 2019, slightly lower than the previous quarter’s reading of 177.6%.
The CCS also reported that on average, Canadians are carrying a debt load of $30,000 each – far above the $12,000 level just 20 years ago.
“Canadians continue to rely on their credit cards or lines of credit to supplement costs of living,” CCS president Scott Hannah said.
“If the economy continues to slow amidst trade tensions and other factors, Canadians need to prepare now for a potential recession in the future.”
Hannah also cited the latest survey of employed Canadians by the Canadian Payroll Association, which found that 1 in 3 consumers currently hold credit card debt, and 38% will need more than a year to pay off said debt.
Additionally, 1 out of 3 Canadians indicated that their debt loads have increased since last year, and that they are spending more than their net income. As much as 43% are forced to live paycheque to paycheque, while fully 83% confessed anxiety over growing daily living costs.
“We are not surprised by these latest statistics, as we continue to hear from Canadians, who are having difficulty managing their rising debt levels and how to effectively manage the increasing costs of living without relying on credit,” Hannah stated.