Nearly one in three Canadians can’t pay their bills: survey

Nearly one in three Canadians can’t cover their debts, a new survey suggests, as inflation and rising interest rates are still top of mind.

Credit reporting agency TransUnion, which surveyed 956 Canadian adults, found that 32 percent of respondents are not expected to be able to pay off their current bills or loans in full. Of those, only 38 percent planned to cover a partial amount.

As the cost of living in Canada continues to rise, Canadians seem to be less confident about the financial situation. About 57 percent of respondents felt their household finances were as good or better than planned, according to the survey, down two percent from the same period last year.

“Macroeconomic pressures continued to weigh on Canadians as heightened concerns about inflation and rising interest rates affected consumer behavior,” the report said. “Canadians continued to be concerned about debt, especially with regard to taking on additional credit.”

The drop in spending to deal with this economic reality is noticeable. More than half of respondents said they have cut back on discretionary spending in the past three months, while only one in 10 said they had increased that form of spending.

Of those unable to pay their bills and loans, 22 percent said they will borrow money from friends and family, while 11 percent plan to take out a personal loan. Another 19 percent say they do not know how they will pay.

The new research comes as the Bank of Canada is expected to issue an interest rate announcement next Wednesday. Despite an increase in the unemployment rate, forecasters expect the central bank to raise interest rates again next week.

The central bank’s latest hike in June took overnight interest rates to their highest level since 2001.

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