The economic impact of the COVID-19 pandemic has reduced the ability of low-income Canadians to pay their bills on time – including rent and mortgage payments.
A survey commissioned by national charity Prosper Canada and conducted by analytics firm Leger found that a significant number of respondents earning under $40,000 report that almost all aspects of their finances have worsened since the onset of the COVID-19 pandemic.
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Respondents were asked in the survey to indicate whether their situation had worsened, remained the same, or improved with respect to their savings, employment earnings, debt, reliance on credit to meet day-to-day needs, ability to pay bills on time, and ability to pay their rent or mortgage. On all but one indicator, more respondents with incomes under $40,000 than those earning $40,000 or more reported that their situation had worsened.
The survey found that 46% of respondents earning incomes under $40,000 said their employment earnings had worsened, compared to 27% of those with incomes of $40,000 or more. Meanwhile, 30% of respondents with lower incomes indicated their personal debt situation had worsened, versus 20% of respondents with higher incomes.
Additionally, 21% indicated their ability to pay bills on time had weakened. More Ontarians reported a worsening situation with respect to their employment earnings (37%) and personal debt levels (27%) compared to the 26% and 18%, respectively, seen in other provinces.
“These results underscore that Canadians with low and moderate incomes are at real risk of being left behind in Canada's economic recovery and seeing their precarious finances worsen in the months ahead,” said Elizabeth Mulholland, chief executive officer of Prosper Canada. "For these and other over-leveraged households, increasing debt and reliance on credit are relentlessly pushing them closer to insolvency. Without hands-on financial help and advice, and real flexibility from creditors, many of these households will not make it financially through this pandemic.”