Canadians piled on more debt during COVID-19, see quality of life worsen: survey

Canadians struggling with debt are seeing their quality of life worsen during the COVID-19 pandemic, which has seen inflation rise, the 2021 BDO Affordability Index indicates.

Debt-ridden Canadians are seeing their quality of life diminish even further as the COVID-19 pandemic drags on, a new survey suggests.

The 2021 BDO Affordability Index released Monday shows 43 per cent of Canadians added to their existing debt thanks to the pandemic. That’s up four per cent from the year before.

One quarter (26 per cent) of Canadians have added at least one new type of debt, and 70 per cent of them say this new debt is making their quality of life even worse.

Jennifer McCracken, senior manager and licensed insolvency trustee with BDO Debt Solutions, told Global News that inflation is impacting debt-ridden Canadians ability to save.

“It’s really demonstrating that there are difficulties for a lot of Canadians as a result of the pandemic, and as a result of the debt levels that they’re carrying,” she said.

The fourth-annual BDO Affordability Index, which was done in partnership with Angus Reid Group, surveyed just over 2,000 Canadians in early September. The survey is reliable to within plus or minus 2.2 per cent, 19 times out of 20, had all Canadians been polled.

Forty-two per cent of Canadians said they’re saving less or not at all during the pandemic, with 57 per cent saying it’s because of increased spending on essentials like groceries and housing. That’s up 13 per cent from last year.

To manage debt, 64 per cent of respondents reduced non-essential spending, 47 per cent reworked their budgets and 30 per cent sold off their possessions. Twenty-four per cent of Canadians applied for government benefits to reduce debt, 18 per cent started a new job and 17 per cent added a second job or a side gig.