A new report says COVID-19 has widened the gap between the haves and have-nots in Canada, amplifying the economic disparities that existed pre-pandemic. Pandora Avenue where over a hundred homeless people are temporarily living in tents and on the street as the city continues to monitor the COVID-19 pandemic in Victoria, B.C., on Wednesday, March 25, 2020. THE CANADIAN PRESS/Chad Hipolito

A new report says COVID-19 has widened the gap between the haves and have-nots in Canada, amplifying the economic disparities that existed pre-pandemic. Pandora Avenue where over a hundred homeless people are temporarily living in tents and on the street as the city continues to monitor the COVID-19 pandemic in Victoria, B.C., on Wednesday, March 25, 2020. THE CANADIAN PRESS/Chad Hipolito

Rich get richer, poor poorer: Report says pandemic intensified economic disparities

Many households reported being just hundreds of dollars away from bankruptcy

A pair of new reports say Canada is undergoing a “K-shaped recovery,” with working-class Canadians going deeper into debt while those at the top prosper.

The reports say the uneven recovery is amplifying economic disparities that existed pre-pandemic and widening the gap between the haves and have-nots.

With the second wave of COVID-19 intensifying across the country, the two reports also suggest the divide between the rich and poor in Canada could worsen.

The affordability index by BDO Canada Ltd. found that while one in five Canadians say they are better off, nearly two in five say their personal finances deteriorated during the first wave.

The index, based on polling data by the Angus Reid Group, found that those who are worse off are nearly four times more likely to say their debt load is overwhelming.

Meanwhile, the latest MNP Ltd. consumer debt index says the pandemic recession is putting a spotlight on inequalities between the well-off and those dealing with job losses, debt, eviction and food insecurity.

Grant Bazian, president of MNP, says his firm’s index “highlights the divergent experiences of Canadians during COVID.”

“While some are fortunate enough to be able to continue working in their present jobs, but from home, others continue to struggle with financial uncertainty and not knowing whether their job will still be around after the pandemic,” he says.

The MNP index, based on polling data by Ipsos, found that over half of millennials surveyed say they regret the amount of debt they’ve taken on in life.

Many households reported being just hundreds of dollars away from bankruptcy, a sign they’re living paycheque to paycheque.

MNP says 44 per cent of households earning $40,000 to $60,000 are $200 or less away from insolvency, including 22 per cent who are already insolvent.

Both reports underscore a yawning chasm between Canadians who are losing ground and those whose financial situation has improved during the pandemic or hasn’t changed.

Doug Jones, president of BDO Debt Solutions, says the firm’s affordability index shows Canadians are struggling more and more with the cost of living.

He says COVID-19 has prompted Canadians to cut back on spending and save more, but that people are also finding it more difficult to keep up with debt.

“These factors will likely put long-term stress on families and the economy,” Jones says in a statement. “Now is the time to keep a close eye on household budgets and avoid debt whenever possible.”

The survey found that two-thirds of Canadians with debt cannot keep up with their debt payments or have had to make sacrifices in their budgeting.

While this typically involves foregoing non-essential “nice-to-have” purchases like entertainment or recreation, the survey found that nearly a quarter of Canadians forego essentials like food or clothing.

The survey also showed that residents of British Columbia, Alberta and Ontario were more likely to accrue debt during the pandemic.

Meanwhile, Canadians who are saving more tend to be young, university educated and earn more than $100,000, the survey found.

This cohort tended to shift spending away from non-essentials such as restaurants and travel into savings — reducing concerns about debt.

The Angus Reid online survey, in partnership with BDO Canada, included 2,047 Canadian adults surveyed between Sept. 1 and Sept. 8.

The Ipsos online poll, conducted for MNP between Sept. 1 and Sept. 3, included 2,001 Canadians.

According to the polling industry’s generally accepted standards, online surveys cannot be assigned a margin of error because they do not randomly sample the population.

The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Coronaviruseconomy

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

RCMP Cpl. Cory Lepine pictured at BC Livestock Producers Co. in Kamloops, Nov. 16. (Phil McLachlan - Black Press Media)
Meet B.C.’s only cowboy cop; a voice for the livestock industry

Cpl. Cory Lepine serves as a bridge between the law and those who make a living off the land

Métis carver and elder John Sayer works at the Storefront School in Salmon Arm on Thursday, Nov. 19, helping students learn to carve and sharing his culture, while, in background, student William Dicer hones his carving skills. The masks pictured will be placed on trees in Little Mountain Park as part of a student project. (Martha Wickett - Salmon Arm Observer)
Video: New faces to emerge from the forest in Salmon Arm’s Little Mountain Park

Students at Storefront School join Métis elder in project that will add small carvings to trees

Revelstoke Mountain Resort was voted Best Ski Resort in Canada in the 2020 World Ski Awards. (Liam Harrap/Revelstoke Review)
Revelstoke Mountain Resort voted best in Canada

The World Ski Awards announced the 2020 winners

Enderby’s M.V. Beattie Elementary School hosts a two-week, weekday book fair at the school, with strict COVID protocols in place, Nov. 23 to Dec. 4 from 7:45 a.m. to 2:30 p.m. If you can’t make it to the school, there is an online shopping link with proceeds going to the book fair. (File photo)
Enderby school book fair includes online shopping link

Fair at M.V. Beattie Elementary runs Nov. 23 to Dec. 4 weekdays at school or you can shop online

Kyle Charles poses for a photo in Edmonton on Friday, Nov. 20, 2020. Marvel Entertainment, the biggest comic book publisher in the world, hired the 34-year-old First Nations illustrator as one of the artists involved in Marvel Voice: Indigenous Voices #1 in August. THE CANADIAN PRESS/Jason Franson
VIDEO: Indigenous illustrator of new Marvel comic hopes Aboriginal women feel inspired

Kyle Charles says Indigenous women around the world have reached out

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Prime Minister Justin Trudeau speak to the media about the COVID-19 virus outside Rideau Cottage in Ottawa, Friday, Nov. 20, 2020. THE CANADIAN PRESS/Adrian Wyld
Long-awaited federal rent subsidy program for businesses hurt by COVID-19 opens today

The new program will cover up to 65 per cent of rent or commercial mortgage interest

Multiple protesters cited unsubstantiated claims about the virus and the belief that their “rights are being violated” as reasons for their attendance. (Jesse Day - Western News)
‘End the lock-down’ protesters hit the streets in Penticton

The group plans to gather every weekend until restrictions have been lifted, organizer says

Kelowna’s Post-Modern Connection performs for Riot on the Roof on the top of the Vernon Parkade Saturday, Aug. 22. The band is scheduled to play in the “Live @ The KCT” series in Kelowna on Dec. 4. (Vernon Public Art Gallery photo)
Kelowna concert series moves online due to new health orders

Rebellious Unicorns series ‘Live @ The KCT’ has moved to an online model until further notice

Kelowna City Hall. (Michael Rodriguez - Capital News)
Kelowna city staff recommend allocation for nearly $8M provincial COVID-19 grant

Staff suggest the funds be used for lost revenues, support for the Kelowna International Airport

An Oceana Canada audit of Canadian fish stocks reveals a growing number with critical populations, calling on Fisheries and Oceans Canada to enact existing commitments. (File photo)
B.C.’s declining fisheries the result of poor DFO management: audit

Oceana Canada calls for follow through on government commitments

Most Read