The COVID-19 pandemic has left nearly one in three Canadians in a financial situation so dire they worry they will not recover from it.
That’s according to a new survey released Tuesday by FP Canada, a national organization representing approximately 21,000 financial planners. The survey, which polled 1,538 people in late September, found that 30 per cent of Canadians are concerned they will not recover from the financial hit brought on by the coronavirus pandemic. More than one-third of respondents said they have taken on new debt or withdrew from personal savings to make up for shortfalls and cover expenses.
The report, conducted by Leger on behalf of FP Canada, also found that 42 per cent of Canadians believe they are not in a strong enough position to handle the second wave of COVID-19. Another 41 per cent said they are currently in a worse financial situation than before the pandemic.
“The coronavirus pandemic is a financial emergency that’s turned into a crisis because of how long it’s been sustained for,” Shannon Lee Simmons, a financial planner with the New School of Finance, said in an interview.
“I think a lot of Canadians didn’t have financial plans to prepare them for something that could be an ongoing crisis. Some people are not in a financial crisis, they kept their jobs, and things are fine... But other people are in this extreme, where they think they might never recover.”
The FP Canada report is one of many surveys released in recent weeks that highlight the financial uncertainty many Canadians find themselves in as a result of the pandemic.
According to BDO Canada’s affordability index, released earlier this month, nearly two in five Canadians said their personal finances deteriorated during the first wave of the pandemic, while one in five are better off. Those who are now worse off are nearly four times more likely to say their debt load is overwhelming.
The Investment Planning Counsel released a report on Monday that found that 20 per cent of investors have changed their life-long financial goal because it now appears “unattainable.”
At the same time, the latest Bloomberg Nanos Canadian Confidence Index found that fewer consumers are feeling optimistic about Canada’s economic prospects.
Simmons recommends that Canadians who are struggling through this pandemic prioritize trying to breakeven and not go into debt.
“If you can do that, that’s winning,” she said, adding that people should set aside their long-term goals and focus on short-term priorities.
“Instead of saying, ‘What am I going to do for the next 30 years?’, look at the next 30 days,” said Simmons. “Prioritize paying off consumer debt, and then look at beefing up an emergency account after you’re debt free.”
With files from the Canadian Press
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.