As B.C. battles its way through the second wave of the COVID-19 pandemic, many British Columbians are reacting to the continual financial headwinds by burying their head in the sand.
That, according to the non-profit credit counselling agency Credit Canada.
Its COVID Wake-up Call survey found that 42 per cent of those receiving some kind of financial support have no idea what they’ll do when federal stimulus money runs out. Nationally, that number is 39 per cent.
One-in-four British Columbians (24 per cent) have used income supports (government assistance, CERB, EI, etc.) and one-in-10 (eight per cent) have used payment deferrals (car, mortgage, rent, lines of credit, credit cards etc.) due to the COVID-19 pandemic.
One-in-10 (13 per cent) say they will turn to traditional borrowing such as family loans, bank loans and credit cards after government support ends. Only two per cent will resort to payday loans or short-term lenders.
Meanwhile, 44 per cent are confident they’ll no longer need financial assistance.
The national survey conducted by pollster Angus Reid found the number of those with no idea what to do next was highest in the Atlantic provinces at 49 per cent and lowest in Quebec at 36 per cent.
Strikingly, only two per cent of those receiving financial supports say they will seek professional help once the relief packages have ended.
Although consumer insolvencies have seen a downward trend in recent months and the household debt-to-income ratio plummeted in the second quarter, the figures are artificially inflated by income supports and may give Canadians a false sense of security, says Credit Canada.
A wave of insolvencies could follow.
"For those without a debt management plan, now is the time to put one in place,” said Keith Emery, Co-CEO of Credit Canada. “When government supports and payment deferrals come to a complete halt, the financial counselling network will reach beyond its critical mass if everyone waits until the last minute to get help.”
November is Financial Literacy Month in Canada.
“As the country continues to deal with the aftermath of the pandemic, people are facing extraordinary financial challenges,” said Emery.
