Manulife Bank’s Financial Health Survey Finds Economic Volatility Taking a Toll on Canadians
New data shines a light on the affordability crisis in Canada; vast majority of Canadians say the Canadian economy is on the brink of a recession, if not already in one.
November 22, 2023
Toronto – Manulife Bank has released its semi-annual Financial Health Survey, finding that the Canadian economy, which has been in a period of volatility and uncertainty for the last 18 months with soaring inflation, record cost of living, and a near fivefold increase in interest rates has, continues to affect Canadians.
According to the results, 86 per cent of Canadians are concerned about the direction of the Canadian economy and a vast majority (84 per cent) think we’re either already in a recession or heading into one within the next year (73 per cent). It’s also becoming clear that things are hitting close to home for Canadians: almost 90 per cent are concerned about the affordability of life in Canada and 70 per cent are worried about their overall financial health and wellness.
“We’ve been in a period of economic volatility for a number of months and that it is not likely to change any time soon,” says Alex Lucas, President, Manulife Bank. “Despite slowing inflation, our data indicates that close to two-thirds of Canadian households still need to renew their mortgages at higher rates which will undoubtedly put a lot more pressure – and stress – on household finances.”
Canadians already have a lot on their mind: 71 per cent worry about being able to afford essentials, like food and housing; 70 per cent are worried about making their mortgage payments and 85 per cent of people who have to renew their mortgage in the next 12 months are worried about having to do so. The results also found that as many as one in three (32 per cent) of homeowners with mortgages think they will be forced to sell their homes if interest rates increase further and fewer than two in five (37 per cent) Canadians feel prepared, financially, to weather further interest rate increases.
Additionally, household debt in Canada is on the rise. Almost half (49 per cent) of indebted Canadians are not comfortable with the amount of debt they have, and four in five (79 per cent) are increasingly worried about making their debt repayments – an increase of 14 points compared to one year ago.
“While the results of our survey are eye-opening, there are often options available to help free up cash flow, pay down debt and help ease some of the stress,” continues Lucas.
According to Lucas, there are things that can be done to help Canadians get through this period of economic uncertainty and ease some of the stress. He recommends starting with the following:
Plan: The survey found that 71 per cent of Canadians don’t have a financial plan. Every Canadian, regardless of income level, should have a plan. The CRA has a helpful website that can help Canadians get started.
Consolidate Debt: Many Canadians were caught off-guard with the rapid increase in interest rates and how that impacts debt repayment. Canadians can consolidate lines of credit into a single solution with a potentially lower interest rate.
Rainy Day Fund: Canadians should have three months’ worth of savings accessible to ease stress and Concerns highlighted in the findings.
Seek Professional Help: If Canadians feel that they are not able to make it all work, speaking to a certified financial planner or advisor can help eliminate stress and prepare for uncertainty.
Manulife Bank is committed to improving Canadians’ financial health with solutions that provide access to better financial outcomes and improved financial health. For more information, visit manulifebank.ca, or click here to find an advisor near you.
About the Manulife Bank of Canada Financial Health Survey
Now in its 13th year, the Manulife Bank of Canada poll surveyed 2,001 Canadians in all provinces between ages 20 and 69 with household income of more than $40,000. For the past six years, the survey has been conducted online by Ipsos and the current survey took place between October 5 and 11, 2023. National results were weighted by gender, age, region, and education. This survey has a credibility interval of +/- 2.5 per cent 19 times out of 20, of what the results would have been had all Canadian adults between the ages of 20 and 69 been surveyed.
About Manulife
Manulife Financial Corporation is a leading international financial services provider, helping people make their decisions easier and lives better. With our global headquarters in Toronto, Canada, we provide financial advice and insurance, operating as Manulife across Canada, Asia, and Europe, and primarily as John Hancock in the United States. Through Manulife Investment Management, the global brand for our Global Wealth and Asset Management segment, we serve individuals, institutions, and retirement plan members worldwide. At the end of 2022, we had more than 40,000 employees, over 116,000 agents, and thousands of distribution partners, serving over 34 million customers. We trade as 'MFC' on the Toronto, New York, and the Philippine stock exchanges and under '945' in Hong Kong.
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