About 41% are financially stressed, up from 37% last year, report says
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About 41 per cent of working Canadians are financially stressed, up from 37 per cent last year, according to a report released Thursday from the association, which represents payroll workers and has been tracking Canada’s ongoing financial stress storm since 2021.
A previous report from TransUnion showed Canadian household debt hit a record high of $2.41 trillion in the second quarter of the year, with mortgage debt making up 74 per cent of the total outstanding balances.
It’s not just homeowners feeling constrained by higher costs either. Other research indicates renters face greater financial difficulty compared to homeowners, especially as renters tend to have lower salaries and put more of their after-tax pay into their housing costs.
A quarter of respondents in the National Payroll Institute report said they were living paycheque to paycheque and admitted they would find it challenging if their pay was delayed by just one week. But even folks who earn six-figure salaries are struggling, with 29 per cent of respondents earning $100,000 or more living paycheque to paycheque.
Tzanetakis explained higher incomes don’t necessarily equate to less financial stress.
“It’s what you do with money that you get, and it’s those habits related to spending, saving and managing debt, that are core determinants of financial stress,” he said, adding that Canadians need to be proactive by paying their credit card bills on time and lower their overall debts.
As for whether the storm could worsen next year, Tzanetakis said it’s hard to predict.
“The easing of inflation and the sort of the downward trajectory of interest rates could have a slightly positive impact,” he said. “However, people still need to take their household finances into their own hands and really improve their financial habits because that’s what’s going to really make an impact.”