While a significant number of Canadian’s have used either government income support or payment deferrals to get them through the financial impact of the COVID-19 pandemic, an alarming number admit that they won’t know what they will do when that support comes to an end.
A recent survey sponsored by Credit Canada using a representative sample of 1,500 Canadians revealed that, while one-in-four Canadians (24%) have used income supports (such as CERB) and one-in-10 (9%) have used payment deferrals, two-in-five (39%) have no idea what they’ll do when the support runs out.
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According to Credit Canada, this number balloons to 49% in the Atlantic provinces before dropping to 36% in Quebec. Additionally, this uncertainty is most prevalent among those aged 35 to 54 (44%) and levels out to 36% with both the 18 to 34 and the 55-plus age cohorts.
Additionally, the survey found that only 2% of those receiving financial supports will seek professional help once the relief packages have ended.
Experts point to government support by way of income transfers combined with mortgage deferrals and low interest rates as reasons why Canada’s household debt service ratio shrank in the first half of 2020. However, the country may still see a rise in delinquencies and insolvencies into 2021 if consumers don’t adequately manage their finances.
“For those without a debt management plan, now is the time to put one in place,” said Keith Emeryco-chief executive officer of Credit Canada. “When government supports and payment deferrals come to a complete halt, the financial counselling network will reach beyond its critical mass if everyone waits until the last minute to get help.”