Personal

Debt
Issues in
Canada
By Catherine Lau #300367279
 02
01 Major Types of
Introduction Debt

03
Reasons 04
Behind Impacts

05
Recommendatio 06
n Conclusion
 INTRODUCTION
• Personal debt is a significant issue in Canada
• 73.2% of Canadians have an outstanding debt balance
• 31% of them believe that they had excessive debt
 What is personal debt
The outstanding amount of money owed by an
individual to lenders such as banks, credit
card companies, or other creditors
Percentage of Canadians holding debt,
by type of debt
 Major Types of Debt

Mortgages Credit Card loan Vehicle Loan

Around 40% of Canadians The second largest category About 28% of Canadian
are carrying a mortgage with of consumer debt, with an hold a vehicle loan or lease
a median of $200,000 average balance of over with an average balance
$4,000 per cardholder $26,483
 Major Types of Debt

Lines of Credit Student Loan

Flexible than personal loans. Around 50% of Canadians
Some individuals borrow for aged 18 to 24 have student
home renovation, weddings, loans to support their
medical expense etc education expenses
 Reasons behind the high debt level
issue

High
Housing Increased High
Cost cost of Living Interest Rate

• Canada has the third- • High inflation rate • Increased costs of

highest house price-to- • Increased costs of borrowing due to
income ratio among consumer goods the raise of policy
OECD • Reduced affordability of interest rate
• Canadians are taking on housing or rent • Higher repayments
larger mortgages to • Especially visible to the
finance their homes young adults age group
Impacts of High Consumer Debt Level

Positives
• Can be viewed as a sign of economic growth
as individuals are making more purchases
and investments
• Improve individuals’ standard of living
• Achieve life goals easily
• Enhance job opportunities and earning
potential (student loans)
 Impacts of High Consumer Debt Level

Negatives

• Experience financial stress and anxiety

• Potentially make individuals reduce other
expenses
(e.g. entertainment, travel, dine-out)
• Negative impact on individual’s credit score
if unable to make repayment timely
• Banks may have to expect higher
delinquency level
 Recommendations
Design a financial
plan
Develop a short-term (3-5 years) and long-term (5-10 years) plan

Avoid New Debt

Consider reducing credit card usage or taking out large loans
Seek Professional
Advice
Ask professional financial planners or consultants to seek advice
Buying is good, but don't forget to manage
your financial status and plan for the
future before it’s too late!

Conclusion
Thanks
By Catherine Lau 300367279