Summer Spending Sees Canadians Deeper in Debt

32% didn't set a summer spending budget

TORONTO, Aug. 31, 2015 /CNW/ - Many Canadians didn't seem to let economic uncertainty and concerns about another recession spoil their summer fun. As summer comes to an end, almost one third of Canadians (29%) are carrying more debt than they did in May, according to an Ipsos Reid poll conducted on behalf of BDO Canada Limited. And this may not come as a surprise to some, since 22% admit they exceeded their summer spending budget, while 32% didn't set a summer budget to begin with.  

Despite warnings from government and financial experts about high personal debt levels, one in three (33%) Canadians admit that they spent more on summer activities this summer than last year, while 24% say they spent less. 43% say they spent about the same amount.

"For many Canadians, summer is time to get away from the realities of life, to relax and enjoy a vacation," says Blair Davidson, President, BDO Canada Limited. "But this year, Canadians returned from vacation to a big drop in oil prices, stock market turmoil and indications of another recession, with some having spending more than they expected this summer."

Davidson adds, "With the possibility of tough economic times ahead, now is the time for Canadians to take action and reduce their debt, especially those who saw their debt rise along with the temperature this summer."

Half of Canadians stuck to budget
Nearly one half (46%) of Canadians say they met their summer spending budget. Those most likely to stick to their budget were Quebecers (51%), followed closely by residents of Ontario (48%) and Atlantic Canada (48%). Residents of Saskatchewan and Manitoba (42%), B.C. (41%) and Alberta (39%) were less likely to meet their budget.

Millennials and parents more likely to overspend
While 22% of Canadians exceeded their summer spending budget, the numbers were higher among Millennials and parents. For young adults aged 18 to 34, 28% said they exceeded their budget. Respondents with kids (34%) were nearly twice as likely as those without (18%) to exceed their budget.

Set limits on summer spending
The average Canadian spent $701 on vacations and day trips, $770 on food, drink and entertainment and $1,422 on home renovations and improvements this summer. But some far surpassed those numbers; in B.C., respondents spent $2,961 on home renovations, while Albertans spent $1,488 on dining and entertainment.

Davidson says it's important to stick to your budget. "While you receive instant gratification from taking a trip or buying a big-ticket item, you could run into debt problems if you can't pay for it right away. Canadians currently owe $1.63 in debt for every dollar they earn—we need to keep a closer eye on our budgets and start paying down our personal debt."

For this survey, a sample of 1,004 adults from Ipsos' Canadian online panel was interviewed online. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within +/ - 3.5 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

BDO Canada Limited's Financial Recovery Services practice has been in business since 1958.  BDO's advisors include Trustees in Bankruptcy and proposal administrators who are trained, certified, and knowledgeable about dealing with debt in Canada. BDO Trustees in Bankruptcy are Officers of the Court and licensed by the Office of the Superintendent of Bankruptcy (OSB), an agency of Industry Canada.  Trustees in Bankruptcy are the only professionals who are able to stop legal action against the debtor.

SOURCE BDO Canada Limited

Media inquiries please contact: Talha Wasti, Environics Communications, 416-969-2658, [email protected]