A majority of Canadians admit they’re just $200 away from not being able to pay their monthly bills.
That’s according to MNP Ltd. latest quarterly report survey Thursday (April 8) that accounted for 2,001 adult Canadians between March 4 and 9.
It found 53 per cent of households are teetering the brink of insolvency with one in three saying they have no money left over at month’s end.
Canadians, on average, are left with $625 after making monthly bill and debt payments – down 15 per cent from the $733 reported in December.
READ MORE: Canadians debt levels hit record highs at end of last year, says CMHC
“The number of Canadians with virtually no wiggle room in their household budgets has reached a five-year high,” said Grant Bazian, president of the national accounting firm.
As a result, a quarter of Canadians took on more debt amid the COVID-19 pandemic.
Approximately 14 per cent used credit cards and seven per cent said they used a new line of credit to make monthly payments.
Data indicates a looming “avalanche of households falling behind on payments or defaulting on loans, mortgages, car payments or credit cards,” Bazian said.
READ MORE: Canadian households added record mortgage debt in late 2020: StatsCan
Respectively, 20 per cent of households dipped into savings to pay their bills and three per cent took out a bank loan or deferred their mortgage payments in order to stay afloat.
“Those taking on more debt are becoming increasingly vulnerable to interest rate increases. They might find that their debt becomes unaffordable when that happens,” Bazian said.
A portion of Canadians, 35 per cent, are concerned those rising interest rates could push them towards bankruptcy.
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