Even as the Ontarian economy begins to re-open after months of being shuttered due to COVID-19, four in ten (44%) Ontarians’ work situation is affected by the pandemic. A recent poll by Ipsos carried out on behalf of MNP LTD has found that almost two in ten are either working reduced hours or receiving reduced pay (17%) or have lost their job (15%). In addition, many say someone in their household has lost their job (14%) or is working reduced hours or receiving reduced pay (9%).
“While some are starting to head back to more regular work, their pay or hours might not be the same as they were before. That coupled with delaying payments over the last few months, and already being stretched thin before the pandemic, means a lot of people will not be able to meet their debt repayment obligations. I would recommend anyone who finds themselves in that position speak with a professional who can offer debt advice,” says David Gowling, a Licensed Insolvency Trustee with MNP LTD.
Many are increasingly concerned about the longer-term effects of the pandemic. A third (35%) in Ontario say they are worried about the economic fallout from COVID-19, a whopping 15 point increase from March. They are also worried about the current state of the Canadian economy (31%, +6), and the chances of a recession (25%, +2).
Despite high unemployment and concerns about the economy, Ontarians are feeling slightly better about their personal financial situations now than they were in March. This is likely due to government support helping some families stay afloat. Compared to levels measured just before the pandemic in Canada, Ontarians are less worried about how they will pay their bills (19%, -14), and affording the necessities for their family (17%, -11): both the largest declines compared to the other provinces. Ontarians are also now less worried about their level of debt (20%, -10).
“When we see people with money issues or who have become insolvent, job loss is usually one of the biggest catalysts. In this situation, the short-term government financial support has fortunately softened the initial blow for many. But if you are feeling like you are in over your head, you should be making a plan for how to cope when that support runs out.”
What Canadians Plan to Do When CERB Runs Out
Nationally the survey looked at what Canadians plan to do when emergency benefits offered during the coronavirus pandemic run out. For many who are currently receiving COVID-19-related government financial support, they say they will have to simply cut back any way they can when government support ends (46%). A third (32%) say they will apply for EI, followed by using their savings to pay bills (30%). One in ten plans to file a consumer proposal (7%) or declare bankruptcy (6%) after government support ends. Four per cent say they will sell their home.
Gowling says that consumer insolvencies are expected to spike in Ontario in the wake of the pandemic as many Ontarians were already feeling a tremendous strain on their pocketbooks.
“Relief measures like CERB have been a much-needed lifeline for those in the province who have felt the impact of wage loss during COVID. While these measures have been helpful in providing some breathing room for many, individuals will need to address their underlying financial problems in the long term,” says Gowling
Licensed Insolvency Trustees are government-regulated debt relief professionals who can review all debt relief options. They are empowered to help debtors reorganize their financial affairs and, where appropriate, can even help them avoid bankruptcy by facilitating an agreement with their creditors. They can also guarantee legal protection from creditors as they guide individuals through the consumer proposal or bankruptcy process.