Over 25% of Canadians Unable to Afford an Unexpected $500 Expense: StatCan

Money is removed from an ATM in Montreal, May 30, 2016. (The Canadian Press/Ryan Remiorz)

Over 25 percent of Canadians say they would be unable to afford an unexpected expense of $500 should it arise, says a recent report published by Statistics Canada (StatCan).

“When asked whether their household had the resources to cover an unexpected expense of $500, 26% said that they would be unable to do so,” said StatCan report published on Feb. 13.

The report said that over one-third of Canadian households reported difficulty in meeting their financial needs over the past year and that the majority of individuals across the country are concerned with “increasing challenges of affordability.”

“While the vast majority of Canadians were concerned with rising gasoline and food prices, almost half (44%) said they were very concerned with their household’s ability to afford housing or rent,” the report said.

The research cited by StatCan was collected from the “Canadian Social Survey on Quality of Life and Cost of Living,” which was conducted between Oct. 21 and Dec. 4, 2022.

Questions posed to participants included, “Today, could your household cover an unexpected expense of $500 from your household’s resources?” and “In the past 12 months, how difficult or easy was it for your household to meet its financial needs in terms of transportation, housing, food, clothing and other necessary expenses?”

The research also found that over 45 percent of young Canadians—that is, those aged between 35 and 44 years—had difficulty meeting their financial needs over the past 12 months, which Statistics Canada said was the “highest proportion of any other age group.”

Just over 40 percent of Canadians aged 45 to 54 years reported the same financial difficulty.

Over 30 percent of each age group said they wouldn’t be able to cover an unexpected expense of $500.

Rising Expenses

The report also said that financial difficulties are higher in some areas of the country than others.

Around 38 percent of Canadian households in the Atlantic and prairie regions reporting financial struggles over the past year. Quebec had the lowest proportion with 29 percent.

The report comes several months after the Financial Consumer Agency of Canada found in its own research that almost 40 percent of Canadians are borrowing money to cover the costs of everyday expenses like groceries and housing rent payments.

“The percentage of Canadians who borrow money to cover daily expenses increased from 26% in 2020 to 38% in September 2022,” the agency wrote in a report, titled “Consumer Vulnerability: Evidence from the Monthly COVID-19 Financial Well-being Survey,” published in November 2022.

It also found that about 25 percent of Canadians regularly spend more than their monthly income.