A new report says COVID-19 has widened the gap between the haves and have-nots in Canada, amplifying the economic disparities that existed pre-pandemic. Pandora Avenue where over a hundred homeless people are temporarily living in tents and on the street as the city continues to monitor the COVID-19 pandemic in Victoria, B.C., on Wednesday, March 25, 2020. THE CANADIAN PRESS/Chad Hipolito

Rich get richer, poor poorer: Report says pandemic intensified economic disparities

Many households reported being just hundreds of dollars away from bankruptcy

A pair of new reports say Canada is undergoing a “K-shaped recovery,” with working-class Canadians going deeper into debt while those at the top prosper.

The reports say the uneven recovery is amplifying economic disparities that existed pre-pandemic and widening the gap between the haves and have-nots.

With the second wave of COVID-19 intensifying across the country, the two reports also suggest the divide between the rich and poor in Canada could worsen.

The affordability index by BDO Canada Ltd. found that while one in five Canadians say they are better off, nearly two in five say their personal finances deteriorated during the first wave.

The index, based on polling data by the Angus Reid Group, found that those who are worse off are nearly four times more likely to say their debt load is overwhelming.

Meanwhile, the latest MNP Ltd. consumer debt index says the pandemic recession is putting a spotlight on inequalities between the well-off and those dealing with job losses, debt, eviction and food insecurity.

Grant Bazian, president of MNP, says his firm’s index “highlights the divergent experiences of Canadians during COVID.”

“While some are fortunate enough to be able to continue working in their present jobs, but from home, others continue to struggle with financial uncertainty and not knowing whether their job will still be around after the pandemic,” he says.

The MNP index, based on polling data by Ipsos, found that over half of millennials surveyed say they regret the amount of debt they’ve taken on in life.

Many households reported being just hundreds of dollars away from bankruptcy, a sign they’re living paycheque to paycheque.

MNP says 44 per cent of households earning $40,000 to $60,000 are $200 or less away from insolvency, including 22 per cent who are already insolvent.

Both reports underscore a yawning chasm between Canadians who are losing ground and those whose financial situation has improved during the pandemic or hasn’t changed.

Doug Jones, president of BDO Debt Solutions, says the firm’s affordability index shows Canadians are struggling more and more with the cost of living.

He says COVID-19 has prompted Canadians to cut back on spending and save more, but that people are also finding it more difficult to keep up with debt.

“These factors will likely put long-term stress on families and the economy,” Jones says in a statement. “Now is the time to keep a close eye on household budgets and avoid debt whenever possible.”

The survey found that two-thirds of Canadians with debt cannot keep up with their debt payments or have had to make sacrifices in their budgeting.

While this typically involves foregoing non-essential “nice-to-have” purchases like entertainment or recreation, the survey found that nearly a quarter of Canadians forego essentials like food or clothing.

The survey also showed that residents of British Columbia, Alberta and Ontario were more likely to accrue debt during the pandemic.

Meanwhile, Canadians who are saving more tend to be young, university educated and earn more than $100,000, the survey found.

This cohort tended to shift spending away from non-essentials such as restaurants and travel into savings — reducing concerns about debt.

The Angus Reid online survey, in partnership with BDO Canada, included 2,047 Canadian adults surveyed between Sept. 1 and Sept. 8.

The Ipsos online poll, conducted for MNP between Sept. 1 and Sept. 3, included 2,001 Canadians.

According to the polling industry’s generally accepted standards, online surveys cannot be assigned a margin of error because they do not randomly sample the population.

The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Coronaviruseconomy

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

best
Heartland Stationer’s lands ‘Stettler’s Best Kept Secret’ award through the Stettler Board of Trade

Successful long-time business will be starting a new chapter with a name change and relocation

lights
Mark your calendars for the annual ‘Festival of Lights’ holiday events

Annual celebration raises funds in support of patient care at the Stettler Hospital

Larry
Reeve Larry Clarke reappointed for another one-year term, leading into elections in 2021

Clarke was acclaimed during council’s recent organizational meeting held Oct. 21st

Alberta children whose only symptom of COVID-19 is a runny nose or a sore throat will no longer require mandatory isolation, starting Monday.
477 new COVID-19 cases confirmed in Alberta on Thursday

Changes being made to the COVID-19 symptom list for school-age children

Ember
Stettler’s own Ember Graphics takes Board of Trade 2020 Business Service Award

The 2020 Business and Citizenship Awards Gala was held Oct. 22nd

Royal Alexandra Hospital front-line workers walk a picket line after walking off the job in a wildcat strike in Edmonton, on Monday, October 26, 2020. THE CANADIAN PRESS/Jason Franson
Alberta labour board orders health-care staff who walked off the job to go back to work

Finance Minister Travis Toews said in a news release that he was pleased with the labour board’s decision

Pilots Ilona Carter and Jim Gray of iRecover Treatment Centres, in front of his company’s aircraft, based at Ponoka’s airport. (Perry Wilson/Submitted)
95-year-old Ilona Carter flies again

Takes to the skies over Ponoka

Children’s backpacks and shoes are seen at a daycare in Langley, B.C., on Tuesday May 29, 2018. Alberta Children’s Services Minister Rebecca Schulz says the province plans to bring in a new way of licensing and monitoring child-care facilities. THE CANADIAN PRESS/Darryl Dyck
Alberta proposes legislation to change rules on child-care spaces

Record-keeping, traditionally done on paper, would be allowed digitally

Prime Minister Justin Trudeau shakes hands with US Vice-President Joe Biden on Parliament Hill in Ottawa on Friday, December 9, 2016. THE CANADIAN PRESS/ Patrick Doyle
A Biden presidency could mean good news for Canadian environment policy: observers

Experts and observers say even a U.S. outside the Paris agreement may ultimately end up in the same place

People take a photo together during the opening night of Christmas Lights Across Canada, in Ottawa, on Wednesday, Dec. 4, 2019. The likelihood that most Canadians will enjoy a holly jolly Christmas season of gatherings, caroling and travel is unlikely, say public health experts who encourage those who revel in holiday traditions to accept more sacrifices ahead. THE CANADIAN PRESS/Justin Tang
Ho, ho, no: Experts advise preparing for a scaled-back COVID holiday season

Many of the holiday season’s highlights have already been scrapped or are unlikely to take place

Sen. Kim Pate is shown in Toronto in an October 15, 2013, file photo. The parliamentary budget office says a proposed law that would give judges discretion on whether to apply a lesser sentence for murder could save the federal government $8.3 million per year. THE CANADIAN PRESS/Colin Perkel
Judicial discretion for mandatory minimum sentences for murder would save $8.3M: PBO

The result would be fewer people in long-term custody at federal correctional institutions, experts say

Husky Energy logo is shown at the company’s annual meeting in Calgary on May 5, 2017. THE CANADIAN PRESS/Jeff McIntosh
Husky pipeline spills 900,000 litres of produced water in northwestern Alberta

The energy regulator says environmental contractors are at the site

A raccoon paid a visit to a Toronto Tim Hortons on Oct. 22, 2020. (shecallsmedrew/Twitter)
Who are you calling a trash panda? Raccoon takes a shift at Toronto Tim Hortons

Tim Hortons said animal control was called as soon they saw the surprise visitor

Most Read