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

School District 27 Supt. Chris van der Mark. (Monica Lamb-Yorski photo - Williams Lake Tribune)
COVID-19 takes bite out of SD27 enrolment

Fewer students at schools, but homeschooling up

RCMP
Lockdown drill at Peter Skene Ogden

Police staged three scenarios with students and staff

COVID-19 test tube. (Contributed)
test tube with the blood test is on the table next to the documents. Positive test for coronavirus covid-19. The concept of fighting a dangerous Chinese disease.
Interior Health launches online booking for COVID-19 tests

Testing is available to anyone with cold, influenza or COVID-19-like symptoms

100 Mile RCMP Staff-Sgt. Svend Nielsen. (Patrick Davies photo, 100 Mile Free Press).
RCMP responded to 212 calls in first two weeks of October

B&Es, bears and mischief on the list of reports

A health-care worker prepares to swab a man at a walk-in COVID-19 test clinic in Montreal North, Sunday, May 10, 2020, as the COVID-19 pandemic continues in Canada and around the world. (THE CANADIAN PRESS/Graham Hughes)
Interior Health records 21 new COVID-19 cases over the weekend

Thirty-six cases remain active; two people are in the hospital, one of whom is in intensive care

Provincial health officer Dr. Bonnie Henry presents modelling of COVID-19 spread in B.C., March 25, 2020. (B.C. government photo)
B.C. sets another COVID-19 record with 203 new cases

up to 1,766 active cases in B.C., two more deaths

RCMP. (Phil McLachlan - Black Press Media)
British Columbia man dies during ski trip near glacier west of Calgary

Kananaskis Public Safety and Alpine Helicopters responded around 2:30 p.m.

Prime Minister Justin Trudeau arrives on Parliament Hill in Ottawa on Monday, Oct. 19, 2020, following a week-long break for the House of Commons. THE CANADIAN PRESS/Sean Kilpatrick
One crisis after another for Trudeau since last federal election one year ago

It has been a year of unprecedented calamity and crisis

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Rio Tinto Alcan’s aluminum smelter at Kitimat competes against producers in the Middle East and Russia that have no carbon tax. (Rio Tinto)
B.C. carbon tax highest in Canada, export industries unprotected

B.C. NDP, B.C. Liberals say they’re looking at exemptions

(Pixabay)
Vancouver teacher suspended after swearing, touching students and complimenting underwear

McCabe touched students, including rubbing their backs and necks, touching their hair and hugging them

A glimpse of some of the 480 (approx) cars written off as a result of the acid spills along the Trail highway in 2018. Photo: Trail Times
2 years after huge highway acid spill, Kootenay Ford dealer’s frustration grows with ICBC

Trail AM Ford owner Dan Ashman says he just wants fair compensation from ICBC

Most Read