It's Your Money  

Are you buried in debt?

Canadians are broke and yet they keep on spending.

Almost half our population is on the brink of insolvency and our mounting debt loads are unsustainable.

While our consumer debt issues are not news, the problem is still getting worse and people still won’t stop spending. The latest survey conducted on behalf of insolvency firm MNP Ltd. found that the number of Canadians who are $200 or less away from financial insolvency has climbed to a staggering 48%.

The same survey last fall had the number pegged at 40% and it was around 30% two years ago. These regular check ins are showing just how drastically the debt situation is rising yet we can’t seem to get people to listen.

When this latest quarterly survey results were released, MNP President Grant Bazian stated that

“Canadians appear to be maxed out with no real plan for paying back what they have borrowed.”

In my mind, this perfectly summarizes the position our nation is in.

But simply stating that we have too much debt doesn’t mean much unless you consider what this really means.

How do Canadians expect to pay this debt down?

What happens if (when) the Canadian economy deteriorates further?

These are the tough questions that you need to be asking yourself now.

The increase in bankruptcy rates are caused by three main factors:

  • Consumers taking on too much debt
  • rising interest rates
  • an increase in people losing their jobs due to companies fleeing our un-competitive business environment.

There is not much you can do about our rapidly dissolving business climate and you don’t get a say in the interest rate decisions, but you can take control of your own financial situation.

There may not be an easy or quick fix to your debt load, but the earlier you face it head on the better.

In addition to already being on the brink of insolvency, many of these same survey respondents also stated that they expect to increase their debt load in the next year instead of reducing it, often just to make ends meet.

My guess is that most people resigning themselves to this fate have not done all they can to see if there are other options.

If you have any outstanding debts and you don’t have a budget and a debt management plan in place, you need to start on one, today.

Most people likely feel like they don’t know where to begin but MNPdebt.ca and many other sites have a lot of information to help you get started. The only thing holding you back is you.        


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About the Author

Brett, designated as a chartered investment manager and certified financial planner, is the regional director (Okanagan) for IG Wealth Management.

In addition to his “day job," Brett was appointed to the board of directors of FP Canada (formerly FPSC) in 2014, named as the board’s vice-chair in 2017 and will take over as board chairman in June. 

Brett has been writing a weekly financial planning column since 2012 and provides his readers with easy to understand explanations for the complex financial challenges that they face in every stage of life.

Enhancing the financial literacy of Canadian consumers is a top priority of Brett’s and his ongoing efforts as a finance writer and on the regulatory side through the FP Canada board focus on this initiative.   

Please let Brett know if you have any topics that you’d like him to cover in future columns by emailing him at [email protected].

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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