Manitobans’ debt levels surpass national average

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This article was published 06/10/2022 (714 days ago), so information in it may no longer be current.

Melissa Anderson is using her Mastercard.

She’s watching the debt increase alongside her food and gas bills. Groceries cost probably $200 to $400 more per month, she said — she’s feeding four children.

“I don’t know if I’m ever going to save up for a house,” the PhD student said. “I hope to get that (credit card) debt paid off before I’m done school.”

Anderson is with a majority of Manitobans: 69 per cent say they have debt, according to BDO Canada’s Affordability Index.

Sixty-seven per cent of Manitobans carry credit card balances, and 60 per cent have mortgages, the report found.

All three Manitoba statistics surpass national averages — across Canada, Manitobans were the most likely to say they had debt. Fifty-six per cent of Canadians reported carrying credit card balances and 48 per cent indicated they had mortgages.

The numbers have Vicki Doell scratching her head. The Winnipeg-based licensed insolvency trustee is unsure why Manitoba tops the charts for most reported debt.

“It is something we’re not alone in,” Doell, who works for BDO Canada, said. “We’re definitely seeing that most Canadians from coast to coast are struggling.”

A quarter of surveyed Manitobans reported non-mortgage debt in the $8,501 to just below $20,000 range. Another 26 per cent said they had at least $20,000 of such debt.

Some Manitobans — 28 per cent — reported spending between $100 and $499 on debt payments monthly. Another 53 per cent said debt payments took $500 to $4,999 of their monthly budgets.

Higher interest rates mean more expensive credit card bills for some, Doell noted.

“If their income isn’t increasing, there’s less to go around,” she said.

She’s seeing more retirees and others on fixed incomes unable to service their credit card debts, she said.

And, younger Canadians are saving less for retirement, she noted. Sixty-seven per cent of Canadians ages 18 through 24 don’t have retirement savings, according to BDO’s report.

Thoughts of retirement are far from Obabiyi Olagbami’s mind.

The 18-year-old put back the Pillsbury cookie dough she’d picked up at Walmart — she was already overbudget with groceries and furnishings for her new apartment.

“I haven’t thought about (saving for retirement) at all,” Olagbami, an international student, said. “It’s just trying to make sure I have everything I need right now.”

Olagbami’s days include flipping through store flyers and planning ahead for grocery spending.

“I still have to get meats and… tomatoes, peppers,” she said, looking longingly at the Pillsbury packets. “I might have to drop these for now. I wish I had… the extra money to just get one.”

Inflated prices will cause some Manitobans to postpone retirement and home purchases, Doell said.

“Once (some people have) serviced their debt, they don’t have enough to cover their groceries, their fuel, their utilities, their rent or mortgage,” she said. “(They) have to… relook at their budget.”

Cutting back on food purchases isn’t enough for many, Doell said. She advised seeing a licensed insolvency trustee, like herself, who talks clients through finance restructuring options for free.

Manitoba’s inflation rate has been cooling: in August, the year-over-year difference was eight per cent, compared to the 8.8 and 9.4 per cent of July and June, respectively. Still, prices are elevated. Seventy-eight per cent of Canadians said their personal finances worsened because of inflation, according to BDO Canada’s report.

Fifty-four per cent reported living paycheque to paycheque, up from 51 per cent in 2021. Six in 10 Canadians said they’re saving less than last year or not at all.

A majority — 84 per cent — pointed to the rising cost of essential goods and services as the cause of their increasing debt.

Every Manitoban respondent said the higher cost of living contributed to their new debt.

More than half of Canadian women (54 per cent) said their household income just covered living costs. Nationally, people ages 34 through 55 were most likely to have debt.

Angus Reid Group conducted the survey online from Aug. 5 through 11, questioning 2,008 Canadians. The margin of error would yield +/- 2.2 per cent, 19 times out of 20.

gabrielle.piche@winnipegfreepress.com