There’s no question that COVID-19 has had an enormous impact on the Canadian economy, and will continue to do so for months to come. But rather than view the virus’ effects on the level of the entire economy, we wanted to get a better feel for how the virus is impacting individuals, and how those individuals are navigating through these difficult times.
Fortunately, we weren’t the only ones thinking this way, and we were able to get our hands on a treasure trove of data collected by Loans Canada, who surveyed 956 Canadians between April 15-23, 2020. Let’s dig into the data to see how Canadians are doing in a few key areas.
Employment: Jobs Are Being Lost Hand Over Fist
More than 80% of survey respondents reported experiencing a loss of income due to COVID-19. Some of those losses came in the form of reduced hours, but many of them meant jobs lost altogether. As you might expect, industries like hospitality, construction, and retail suffered the largest number of job losses, with declines of 71%, 63% and 55%, respectively. Yet even 1 in 4 healthcare workers have lost their jobs, largely due to the indefinite postponement of most non-urgent medical services, such as elective surgeries.
Savings: Most Canadians Don’t Have Them
The government of Canada recommends every adult Canadian maintain an emergency fund of at least 3 months of expenses. Many personal finance blogs like ours go a step further and suggest having 6+ months of expenses on-hand. But Loans Canada found that just 1 in 8 Canadians have the government-recommend 3 months of savings, and only 1 in 100 have 6 months worth of expenses saved up. Perhaps most shocking, though, is that half of Canadians don’t have any savings at all. When you put that in perspective, it’s not surprising the government has had to step in so swiftly to keep our nation afloat.
Debt & Expenses: Cause For Worry
1 in 5 survey respondents admitted they had already taken on new debt to deal with COVID-19, and 63% expect to miss at least one bill payment in the next 6 months. 3 out of 4 believe their credit score will be negatively affected by COVID-19, and 2 out of 3 are living in worry that they won’t be able to pay their rent.
Fortunately, the government has taken additional measures to help with that exact problem. Several provinces, including Ontario and B.C., have frozen evictions in an attempt to get landlords and tenants to compromise. So if you’re unable to make next month’s rent payment, you’re in luck: your landlord can’t kick you out, even if you don’t pay a dime.
Canada Emergency Response Benefit (CERB)
On April 6, the Canadian federal government unveiled the Canada emergency response benefit (CERB), a stimulus package designed to support Canadians experiencing financial hardship. Nearly 1 million Canadians applied for the CERB on the first day alone, and more than 7 million have applied in total so far. The Trudeau government has been praised on taking action so quickly, and on the CERB telephone system’s ease of use, but not everyone is thrilled. The study finds that 30% of financially affected Canadians are ineligible for the CERB package, and when you dig into the numbers, it’s not hard to see why.
To be eligible for the CERB, you may not earn more than $1,000 across the 4-week period you are applying for. That means an entry-level worker earning Ontario’s $14/hour minimum wage cannot work more than 72 hours per month. But many employers have cut their employees’ hours in half, dropping them from their regular 160-hour month to 80 hours. This leaves a minimum wage employee on half the hours just outside the qualification zone—they’re earning a hair too much to receive assistance, yet still too little to pay for basic expenses like rent.
What’s more, nearly half of those who have looked to their bank for support have been turned away. Financial institutions are feeling the squeeze, too, and that trickledown effect is a big part of the reason so many Canadians are falling through the cracks.
How To Get Financially Healthy Fast
If COVID-19 has you struggling financially, there are a few things you can do to get yourself back in good shape.
First, cut any obvious non-essential spending. If you’re paying for gym memberships or other services you can’t currently use, contact the service provider and ask them to put your membership on hold—or cancel it altogether. Some merchants will ask you to compromise, but if you stand firm, you’ll be able to cut the expense 9 times out of 10. After all, they’re not providing the service they’ve promised, so why should you pay for it?
Second, do a credit card audit. Gather your most recent three statements from each of your credit cards and look through every purchase, one at a time. Do you really need to buy so many clothes online, or pay for that premium TV package you rarely use? Just acknowledging how much you’re spending in each area of your life is often enough to create change. In business, they say “What gets measured, gets managed,” and it couldn’t be more true here.
And third, if you’re really in dire straits and need a loan fast, fill in this 2-minute form from Loans Canada to receive multiple loan offers customized to your specific needs. There’s zero obligation on your end, but by filling in the form you’ll get a good idea of what sort of funding is available to you. There are options out there for you—it’s just a matter of capitalizing on them.