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News & Media
Canadians with incomes under $40K bearing the financial brunt of COVID-19
19 November 2020
TORONTO, Nov. 19, 2020 /CNW/ - A new Leger survey commissioned by national charity Prosper Canada shows that significantly more Canadians earning under $40,000, versus Canadians earning $40,000 or more, report that almost all aspects of their finances have worsened since the onset of the COVID-19 pandemic.
Canadians 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, proportionally more respondents with incomes under $40,000 than Canadians earning $40,000 or more reported that their situation had worsened:
Forty-six per cent said their employment earnings had worsened (versus 27 per cent of those with incomes of $40,000 or more)
Forty-three per cent indicated their savings had worsened (versus 30 per cent)
Thirty per cent indicated their personal debt situation had worsened (versus 20 per cent)
Twenty-two per cent indicated their reliance on credit had worsened (versus 13 per cent)
Twenty-one per cent indicated their ability to pay bills on time had worsened (10 per cent)
These results come on the heels of Prosper Canada's earlier report,
Roadblock to Recovery
, released last week, which showed that households with low incomes were already spending an eye-opening 31 per cent of their income on debt repayment prior to COVID-19.
"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," commented Elizabeth Mulholland, CEO 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," stated Mulholland.
The survey revealed other statistically significant disparities. More individuals who self-identify as Black, Indigenous and People of colour reported their savings (40 per cent), ability to pay their bills on time (18 per cent) and ability to pay their rent or mortgage (18 per cent) had worsened compared to the 31 per cent, 11 per cent and 10 per cent respectively of white Canadians who reported worsening in these areas. Proportionally more Ontarians also reported a worsening situation, with respect to their savings (38 per cent), employment earnings (37 per cent) and personal debt levels (27 per cent) compared to 28 per cent, 26 per cent and 18 per cent respectively of Canadians in other provinces.
Mulholland pointed out that, "Canada is lagging other countries like Australia, New Zealand and the UK, that have moved swiftly to expand community financial help services to support people who have been hard hit by the pandemic."
Prosper Canada has been calling on the federal government since the beginning of the pandemic to make a comparable investment of $15 million to sustain and expand community financial help services across Canada to reach 750,000+ individuals over the next two years.
"If the government is committed to supporting all Canadians to weather this crisis safely, then the time for this investment is now – not next year when it will be too late for many households," Mulholland concluded.
About the research
Prosper Canada commissioned Leger to conduct a survey using an online panel. The survey of 1,539 Canadians was completed between October 9 and 12, 2020. For comparison, a probability sample of 1,539 respondents would have a margin of error of +/-2.5 per cent, 19 times out of 20.
*Please note: throughout the release numbers are reported with those answering 'not applicable' removed.