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Half of Canadians in debt and lacking emergency funds, survey finds

Over half of Canadians who have borrowed money over the past two years have yet to pay it back. A new survey reveals that the majority of young Canadians with debts, don't believe they'll be paying them back anytime soon.
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Not only are almost half of Canadians in debt, but those under 65 also don't believe they'll be able to pay it back before aging into seniority.

Financial woes are no strange occurrence for Canadians. About half of Canadians reported being in debt, according to a new survey.

The Chartered Professional Accountants of Canada (CPA Canada) surveyed 2,000 Canadians aged 18 or older between March 24 and April 4 to better understand the financial impact of the past two pandemic years.

According to the data, three in five Canadians younger than 65 don’t believe they will be able to pay off their mortgage or debts by the time they turn 65. 

"Being in debt is frightening and can make you feel like there's no way out…," CPA Canada financial literacy leader Doretta Thompson said in a press release.

This lack of financial cushioning is also evident in the survey’s finding that more than half of Canadians who have borrowed money to cover daily expenses over the past two years have yet to pay it back.

In a pinch, Canadians seem to be lacking a fallback of emergency funds. If a last minute emergency occurred, the survey found half of Canadians would not be able to come up with $2,500. Two in five would be unable to produce $1,000 in that same scenario and about one in four wouldn’t be able to fork over $500 without borrowing or selling something.

Despite this, when asked to grade themselves on their financial skills, nearly two-thirds of Canadians believe they deserve a B or C grade. Only eight per cent admitted they were failing financially, the survey states.

"There appears to be a disconnect between Canadians' financial behaviours and how confident they feel about their financial skills and knowledge," Thompson said. 

"Most believe they have the knowledge to make the right decisions when it comes to personal finances, but some key indicators around the state of debt and savings point in a different direction."