Figures from Statistics Canada’s latest Survey of Financial Security indicated that more and more Canadian households are finding it difficult to service their debts, mortgages and non-mortgages alike.
Among those who held mortgages, around 4% missed or delayed their bills in 2018. And among those with no mortgages, approximately 11% skipped or paid late their payments.
“Canadians are falling behind on bills, and it gets worse as they assume more debt,” Better Dwelling explained in its analysis of the numbers.
StatsCan numbers covering Q4 2016 showed that around 7% of households with debt-to-asset ratios (DTAs) of less than 25% had late or missed payments. For those with DTAs falling in the 25%-50% range, around 11.5% were delinquent in their debt servicing.
Those with DTAs greater than 50% had the greatest difficulty, with 16.1% of these households struggling with on-time debt payments.
Most crucially, Canadian households are now labouring under considerably tighter conditions, as the average DTA nationwide has grown by 4.41% since then.
“People are shifting their debts around, but not actually making much progress.”
Recent employment figures might help boost Canadian consumers’ purchasing power, however. Unemployment reached a historic 5.6% in May, marking the lowest point in StatsCan’s readings since 1976.
The same month saw 27,700 new employees nationwide, bringing the 12-month total gain ending May to 453,100. Over the last two years, almost 700,000 new jobs have been added to the economy, largely due to the robust growth of service-related industries such as technology and transportation.