Accounting and business service firm MNP says debt anxiety among British Columbians has risen greater than across the nation over the past three months, thus catching up to the worries felt by their fellow Canadians.
Forty-five per cent of British Columbians report being $200 or less away from failing to meet all their financial obligations, as compared to 38 per cent in January. The rate nationwide has remained the same in this time, an also stands at 45 per cent.
And, 29 per cent of British Columbians say they can’t cover their bills, up from 17 per cent in January. Nationwide, the rate is 31 per cent, up just four per cent during this time.
The culprit? Interest rate hikes, says Linda Paul, an MNP licensed insolvency trustee.
“The looming prospect of mortgage renewals puts an additional strain on many households — particularly in B.C., where post-renewal mortgage payments have surged more significantly than other parts of the country. This could exacerbate the financial challenges already faced by many British Columbians,” Paul stated in a report published Monday.
In B.C., more people reported “regret” about debt levels than in January (51 per cent, up six points), as opposed to fewer regrets across Canada (44 per cent, down three points).
The Bank of Canada said April 1 that consumer expectation of inflation remains high, at 5.25 per cent as compared to actual inflation of 2.8 per cent.
“Canadians continue to feel the negative impacts of high inflation and high interest rates on their budgets, and nearly two-thirds are cutting or postponing spending in response,” stated the bank, which will announce its interest rate policy on April 10.
“Despite improved financial sentiment across most provinces, British Columbians continue to face significant debt anxieties,” said Paul.
“Notably, B.C. was the only province this quarter to see an increase in households on the brink of insolvency, alongside a rise in concerns about debt repayment and running into financial trouble,” said Paul, adding there is a “social squeeze” among British Columbians.
“Participating in social events or celebrations such as birthdays, weddings, or graduations can be exceedingly expensive. For those who can’t afford to participate, it can be overwhelming and discouraging,” said Paul of her observations.
