Who Did You Vote For, Canada?

Indeed:

One-third of Canadians say they cannot cover their bills and debt payments, while more than half state they are $200 or less away from being unable to cover their financial obligations, according to a new survey.

The latest results from the MNP Consumer Debt Index—gauging Canadians’ attitudes toward consumer debt and their ability to pay bills, cope with unexpected expenses, and adapt to interest rate fluctuations—were released on July 10 and indicate that Canadians’ concerns about debt and their ability to pay bills have reached unprecedented levels of concern.

“As interest rates move upwards and the cost of living remains a challenge for households, the proportion of Canadians who report being insolvent has reached an all-time high, according to the latest MNP Consumer Debt Index,” said MNP, Canada’s largest insolvency firm.

More than half of those surveyed indicated they were $200 or less away from being unable to pay all their bills—up six points since the last quarter. This includes one-third of respondents who said they already do not bring in enough income to pay their bills and make their debt payments, making them insolvent.

This was the highest recorded proportion since the index was initiated five years ago.

“Battered by inflation and higher interest rates, a record number of Canadians say they can’t pay their bills and debt obligations each month,” said Grant Bazian, MNP’s president.

“The escalating burden of household bills and food prices has intensified Canadians’ financial anxiety—and is further compounded by increased debt-servicing costs, particularly for those who are deeply indebted.”

More than half (52 percent) of those surveyed for the debt index regret the amount of debt they have signed up for. About half (48 percent) are concerned about their current level of debt.

Millennials are the most likely to regret the amount of debt they’ve taken on (61 percent), increasing six points since last quarter.

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Average compensation for Canadian tech roles earn about $75,000 less than equivalent jobs in the US.

— Daniel Foch (@daniel_foch) July 15, 2023

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A report by TD Economics ranks Canada’s standard of living, measured by real GDP per capita, far behind other developed nations due to low economic productivity. 

The report, authored by TD Bank economist Marc Ercolao, examined the factors behind Canada’s economic performance and prosperity in recent years.

Ercolao found that while Canada’s economy has benefited from strong population growth, driven by high immigration levels, it has not translated into higher living standards for Canadians.

“There may be a tendency to pin the blame for Canada’s sagging per-capita showing on the country’s rapidly-growing population base given that it has inflated the denominator of the calculation,” Ercolao told BNN Bloomberg.

“However, at the crux of the problem is insufficient growth in the numerator, which in turn is tied to longstanding productivity issues.”

Ercolao identified several areas where Canada needs to improve its productivity, such as increasing research and development (R&D) spending, fostering innovation, enhancing human capital, and diversifying its export markets. 

He argued that Canada’s R&D spending has been falling for two decades, creating an “innovation gap” that hinders its competitiveness and potential growth. 

“This country’s lagging standing in per-capita GDP is not new, but it has been worsening since the pandemic,” said Ercolao.

“At the core of the issue is a sagging productivity showing that has been plaguing the Canadian economy for many years despite the well-intentioned moves of this countries’ policymakers to try and address it,” he continued.

“As of 2021, Canadian R&D spending accounted for roughly 1.7 per cent of GDP, half of the current U.S. share and lower than most other countries.”