Canadian finances shaken by inflation, interest rate hikes: Companies in bankruptcy

Canadians are ill-prepared to cushion the economic shock as they spend more on food, clothing and housing, according to a study conducted for bankruptcy firm MNP.

“Canadians spend a lot of their salaries on basic necessities. statement.

This week, the MNP released its Consumer Debt Index, based on quarterly polls conducted by the Ipsos polling firm.

The effects of inflation and successive interest rate hikes by the Bank of Canada are becoming apparent.

Compared to December 2021, 52% (+5 points) of respondents say it is no longer affordable to feed themselves and their families.

The share of respondents who say that transportation is becoming less affordable jumped 9 percentage points to 49%. Clothing and other household essentials saw her rise from 40% to 45%.

Fewer Canadians are on the brink of bankruptcy than in the previous quarter (46%, -6 points), according to MNP. MNP, Canada’s largest bankruptcy processor, defines bankruptcy as being unable to meet payment obligations of $200 or less by the end of the month.

Despite this figure, the average Canadian has less disposable income due to high prices for essentials, the company said.

Higher prices and interest rates will drive more people into bankruptcy, and the impact will be felt more by young Canadians.

“Triple the carbon tax”

The MNP report was mentioned in the House of Commons on 4 October by Conservative Party leader Pierre Polivre.

“Almost half of Canadians are in $200 bankruptcy, which means they are going to default on their debts and other legal payments,” Poilievre said after referring to the report during a question period. I was.

Polivre has been a constant critic of the government’s fiscal management and has put pressure on the Liberal Party every day over inflation and upcoming federal tax hikes since taking office on September 10.

“The liberal solution to all of this is to raise taxes on salaries and energy, including tripling, tripling, tripling carbon taxes on gas, heat and food. Do you want to cancel your plans to do so?” asked Poirivre.

Governments have defended carbon taxes, citing the need for a “price for pollution” to achieve an “environmental transition”.

Liberals have the support of the NDP, Bloc Quebec and the Greens in overthrowing two recent Conservative motions. call Because there will be no carbon tax or an increase in contributions to the Canada Pension Plan.

“Our government knows that many Canadians are struggling with the cost of living today, and we have liberal solutions,” Deputy Minister Chrystia Freeland said in response to Polivre.

Freeland said 11 million households are eligible for a GST tax credit of up to $500.

The bill is backed by the Conservative Party and has passed the House of Commons as Bill C-30.

Noe Chartier


Noé Chartier is a reporter for the Epoch Times based in Montreal. Twitter: @NChartierET Gettr: @nchartieret