The average debt burden of Canadian households is a continued concern for the government and a new survey shows that many people are trapped by their non-mortgage debts.
The poll conducted in March by debt management firm MNP reveals that 58% of Canadians believe that the only way they will be debt free is if their income increases by 37%.
The issue for those who are already struggling with their finances is even worse, with most saying they would need an extra 49% to pay off their creditors.
Tight household budgets mean that many Canadians have no emergency savings and will often go to a HELOC or other line of credit when faced with unexpected home repairs or other expense.
MNP says that rising interest rates may mean that struggling debtors may take on extra debt to cover existing burdens, creating a cycle of debt that is hard to escape.
Who’s to blame?
Just 45% of those polled blamed themselves for their non-mortgage debts with 20% saying it is due to external factors including taxes (13%), a spouse (10%) or rising BoC interest rates (6%).
Those in Saskatchewan and Manitoba are more likely to blame themselves for their debt levels (53%) as are those with children (51%).
Of those who have consumer debt, Albertans are more likely (69%) to say they would need a significant increase (21% or higher) in their household income in order to live without any consumer debt, compared to other provinces.
This is followed by residents of Atlantic Canada (62%), Saskatchewan and Manitoba (59%), Ontario (55%), Quebec (51%), and British Columbia (50%).