24 April 2019

Unsettling financial news from Canada

As reported by BNNBloomberg:
The number of Canadians who are $200 or less away from financial insolvency every month has climbed to 48 per cent, up from 46 per cent in the previous quarter, in a sign of deteriorating financial stability for many people in the country, according to a new poll.

The survey, conducted by Ipsos for insolvency firm MNP Ltd. and released Monday, also found that 35 per cent of Canadians say an interest rate increase would move them towards bankruptcy, while 54 per cent said they worry about their ability to repay debts...

Ipsos, which conducts the quarterly poll for MNP, surveyed 2,070 Canadians online from March 13-24. 
Ipsos is a global market research and a consulting firm headquartered in Paris, but I note the survey was conducted for an insolvency firm.  The sampling of 2000 Canadians online raises questions as to how those participants were selected (or self-selected).

The sentiment is similar to a report last year indicating that 40% of Americans can't come up with $400 for an emergency.  That survey was conducted by the Federal Reserve Board.

Found the Ipsos report.  The brief methodology paragraph indicates that interviews were done as well as the oline questionnaire:
For this survey, a sample of 1,582 Canadians from Ipsos' online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within +/ - 2.8 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.


  1. Interesting... although after reading the Ipsos report I would word it as "48% of Canadians spend within $200 of their income each month". The actual first sentence of the press release on the report is "Nearly one half (48%) of Canadians are $200 or less per month away from not being able to meet all of their bills or debt obligations each month..." But there isn't any breakdown of what that monthly expenditure by a Canadian entity is... how much is fuel, food, rent, debt, entertainment etc.

    And just for grins.. 2 years ago in 2017 Ipsos reported that ""52% of Canadians are within $200 of financial insolvency".. so things are improving??? *tongue firmly in cheek*
    Ref; https://www.ipsos.com/en-ca/news-polls/half-canadians-200-or-less-away-financial-insolvency-end-month

    1. You may be correct. Spending within $200 of one's monthly income could mean the person is saving $200 per month. That's quite different from the U.S. report of not being able to come up with $400 on short notice.

    2. Hmm.. maybe. The specific wording from the CNN report (referenced above) regarding the $400 unexpected expense in the US is "those who don't have the cash on hand say they'd have to cover it by borrowing or selling something." I know that for example, if I get a $600 unexpected car repair bill I may put it on my credit card and pay if off over the next 2 months. I typically don't have $400 or $600 cash on hand (which is what the CNN uses as the data point).

      I *could* go into savings and pull money out from something, but is that "selling something"? If I pull it out of a mutual fund or a money market fund, is that selling something? In my real world situation, I would put it on a credit card ("borrow the money" in the terminology of the article) and either tighten my belt for the next month to pay it down, or take money out of saving ("sell something") to pay it off the next month, and avoid those very high interest charges.

      I'd like to see a better breakout of what typical annual expenses against income might be. I think that's published by the census bureau, but I'll have to go look to find it.

  2. The US / C exchange rate is really good - for US. Everything does seem much more expensive there, so I am not sure if you make out?

  3. $400 won't even cover a tune-up and two tires (tyres!) on a modern vehicle.

    In the US, it also won't cover a couple of non-insurance-covered Rx's for Tier 2 medications.



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