As inflation continues to sit at a persistently high rate, 4% of Canadians report having fallen behind on housing payments this year, a new survey report from personal finance comparison site Finder.com reveals. This percentage accounts for approximately 1.3M Canadians who haven't been able to keep up with their housing payments.
Renters are the most likely to have fallen behind, with 9% having reported doing so. Of homeowners with a mortgage, 6% said they have fallen behind. Interestingly, Gen Xers were the most at risk of falling behind on either rent or mortgage payments, with 7% reporting this to be the case.
Heightened inflation has put financial pressure on Canadians for months with no immediate end in sight. CPI data released earlier on Tuesday revealed an inflation rate of 7.6% for July. Although down from the previous month, it still sits well above the Bank of Canada's target inflation rate of 2%.
Of those surveyed by Finder, nearly a quarter (24%) said they had taken on debt this year to pay for the higher cost of living. Not too surprisingly, the primary reason cited for taking on loans was to cover bills like rent, mortgage, transportation, and food.
And it's not just low income earners who are struggling to cover costs. The survey found that 30% of middle-income earners -- those making roughly between $50,000 and $100,000 -- had taken on debt to cover living costs. This is nearly three times as much as the highest income earners.
“Middle-income earners are really struggling,” said Romana King, senior finance editor at Finder. "Data shows that wages are not keeping pace with higher living costs and this puts middle-income earners -- the bulk of Canadians -- in a tough position. It forces many to start prioritizing their expenses and finding ways to make ends meet.”
The report noted that although a similar amount of men and women reported taking on debt, with 25% of men and 23% of women, there was a difference in how each handled their rising debt.
"For instance, 63% of women said they are cutting back on personal extras, like clothing or entertainment, in order to combat the rise in their monthly expenditures," the report says. "However, only 53% of men chose to take the same actions to combat the rise in living costs."
When it comes to what age groups are taking on debt, Gen Z, millennials, and Gen X all saw similar rates of just over a quarter. Baby Boomers appear to be less impacted, with just 18% saying they rely on loans and short-term debt to cover their expenses.
"However, two-thirds of baby boomers (66%) were actively cutting back on all spending -- the highest of any generation surveyed -- in order to minimize the impact of inflation in 2022," the report notes.
