Canadians facing cost-of-living and debt fatigue

Canadians’ debt anxiety

Over half of all Canadians report feeling worried or concerned about their debt, and the number of Canadians feeling increasingly anxious surged to four-in-five among those who experienced an increase in debt this past year.

If you are someone who has let out a frustrated scream over your finances, you’re not alone. More than one-in-four respondents revealed that they have done the same.

Surprisingly however, an astonishing 57% of survey participants were complacent towards their debt by not reacting at all to what they owe.

"Unfortunately, we continue to see a trend of Canadians normalizing debt with a focus on only addressing their minimum payments," Wales said. " With record-high debt levels, consumers are grappling with the rising cost of living, and credit cards - which were once used primarily for emergencies - are now being used to carry month over month balances. Add on the prospect of tariff induced price increases or reduced income from layoffs, and many are left feeling numb and overwhelmed."

Among respondents who reported experiencing an increase in debt over the past year, 54% revealed that it affects their mental wellbeing and for those who are uncomfortable with the amount of debt they are carrying, 60% indicated that it affects their outlook on life.

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What Canadians are doing about debt fatigue

Debt fatigue was confirmed by survey respondents who reported being four times more likely (19%) to cry about their debt than communicate with their creditors (5% ), and seven times more likely (57 percent) to have taken no action regarding their debt than to have consulted with a credit counsellor (8%).

"The danger with becoming complacent about your obligations is that a small shift in your circumstances – such as reduced hours at work or an increase in the cost of an essential, like gas, can suddenly make your financial situation extremely difficult to manage," Isaiah Chan, the society’s VP of Programs & Services said.

According to the survey, half of Canadians with increased debt have recently cut back on their savings (48%), used credit instead of cash (50%) or drawn from their savings or investments (51%) while also cutting back on essentials like food (77%) and recreation (72%) to make ends meet.

Furthermore, an overwhelming 70% of Canadians (with increased debt this past year) cut back on essentials, 34% sold personal items, 12% changed their living arrangements and 44% reached out to a financial advisor for assistance.

Previously the largest share of respondents that reached out to a financial advisor was 10%.

Survey methodology

The survey was conducted by the Credit Counselling Society from Jan. 6 to 10, among a representative sample of 1,200 online Canadians who are members of the Angus Reid Forum.