Three in 10 Canadians say cost of daily needs exceeds their means

A new poll examines how affordable life in Canada is — and how it pushes many into debt

By Leo Almazora

Oct 11, 2018

BDO Canada has released the results of its inaugural Affordability Index study, which sheds light on how affordable life is in Canada — and how many are taking on debt just to manage.

According to the poll of 2,000 Canadians, which was conducted by Ipsos for the bank, three out of 10 Canadians don’t have enough money to buy the things they need. Roughly three quarters of respondents (74%) said they live with debt, with the average non-mortgage debt load at $19,977. The most common forms of debt come from credit cards and mortgages.

The study also found that affordability is more of an issue for Canadian women than their male counterparts. Women faced steeper challenges in saving for retirement (73% women vs. 65% men), save for a major purchase (74% vs. 64%), and afford transportation (43% vs. 36%). Women were also more likely to bear heavier debt burdens (52% women vs. 45% men).

Millennials aged 18-34 also said they were significantly impacted, with 18% saying they are putting off having children because of affordability concerns. Women and millennials were also more likely than the general population to report being either “poorly” or “terribly prepared” for significant life events such as:

Purchasing a home (56% among all respondents; 62% among women; 64% among millennials)
Dealing with unexpected costs (50% overall; 54% among women; 54% among millennials)
Having children (50% overall; 51% among women; 57% among millennials)
Retirement (56% overall; 61% among women; 67% among millennials)

Millennials’ concerns about the costs of raising children appear to be borne out by the results from respondents with families. Canadians with children were much more likely to say that their personal debt is so overwhelming that they don’t know what to do about it (34% of parents vs. 20% of respondents without children). Canadian families are also more likely to find it hard to pay for all expense items examined — food, housing and utilities, transportation, retirement savings, leisure, and clothing) than those without children.

The trend of adult children continuing to live at home also weighs on many families, with 18% of Canadians saying they have a child over 18 who still lives at home. Of those families, 76% say renting is too expensive for the adult child.

Among all age groups, the report found that Gen Xers between 35 and 54 were the most likely to have debt (83%). Among those Gen Xers with debt, six in 10 report having a credit card balance. Furthermore, 37% of the Canadian Gen Xers surveyed said they have between $5,000 and $24,999 in non-mortgage debt.

That debt load is potentially weighing on their retirement prospects, as 33% of the group said they had no retirement savings at all, while another 37% said they have too little set aside for retirement.

“This paints a bleak picture as it seems that the majority of those in their prime are unprepared for retirement,” said Doug Jones, president of BDO Canada's Financial Recovery Services practice.

Follow WP on Facebook, LinkedIn and Twitter