Survey finds Canadians making tough spending decisions amid fear of downturn ahead

A third of Canadians anticipate being unable to pay their bills in the coming months, a recent survey has found, amid fears about the possible downturn ahead.

TransUnion released its Consumer Pulse study on Tuesday, which found that 33 per cent of those surveyed expect their bills and loan repayments will rise over the next three months. Twenty-eight per cent of survey respondents said they expect they will be unable to pay one or more of their current bills and loans in full.

Matt Fabian, director of financial services research and consulting at TransUnion Canada, said higher interest rates and elevated cost of living have created “vulnerability among Canadians.”

“Consumers are forced to make trade-off decisions on how to allocate their disposable income in a more expensive environment,” Fabian said in a written statement on the findings.

“While Canadians remain resilient, many consumers report that bills and loans are more difficult to cover, which could lead to interest charges.”

RECESSION FEARS

Canadians appear to be bracing for a recession, according to TransUnion’s research.

 

 

Fifty-seven per cent of survey respondents indicated they plan to reduce discretionary spending, while 36 per cent said they are building up savings and another 31 per cent said they are paying down debts.

“Canadians are spending less, saving where they can, and turning to credit to help manage their household income cash flow,” Fabian said.

Amid higher living costs, 43 per cent of those surveyed said their household finances were worse than planned in the fourth quarter. In total, 57 per cent of respondents said they are not optimistic about their household finances.

CREDIT ACCESS

Access to credit is viewed as important for most Canadians as household finances face headwinds, the study found.

Thirty-nine per cent of Gen Z respondents and 35 per cent of millennial respondents said they plan to apply for a new credit card or refinance existing ones.

“Overall, 86 per cent of Canadians report that access to credit and lending products is important (an increase of seven percentage points year-over-year), with 40 per cent who said it was extremely or very important,” the study said.

METHODOLOGY

TransUnion’s Consumer Pulse Survey of 974 adults was conducted Oct. 3–13, 2023 by TransUnion in partnership with third-party research provider, Dynata. Adults 18 years of age and older residing Canada were surveyed using an online research panel method across a combination of desktop, mobile and tablet devices.

 

This article was reported by BNN Bloomberg