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

A laboratory technician holds a dose of a COVID-19 novel coronavirus vaccine candidate that’s ready for trial on monkeys at the National Primate Research Center of Thailand. (Mladen Antonov - AFP)
Interior Health reports 66 new COVID-19 infections

570 cases are active; 18 in hospital

The real estate market is brisk in the South Okanagan, with home prices increasing according to November, 2020 statistics. (Contributed)
House prices rise while supply is limited in South Okanagan

Real estate market active, according to November statistics from South Okanagan Real Estate Board

santa.
Morning Start: Santa Claus has an official pilot’s license

Your morning start for Wednesday, Dec. 2, 2020

A woman wearing a face mask to curb the spread of COVID-19 uses walking sticks while walking up a hill, in New Westminster, B.C., on Sunday, November 29, 2020. THE CANADIAN PRESS/Darryl Dyck
Interior Health reports 83 more COVID-19 infections overnight

46 cases are now associated with a COVID-19 community cluster in Revelstoke

UBCO Master of Social Work Graduate Alix Longland is reaching out to the local refugee community alongside the Family Resource Centre. (Contributed)
Trauma resources ready for North Okanagan refugees

Family Resource Centre working with UBCO social work grad to reach out to local refugees

Elkhart Gas Station, located on Highway 97C about 60 kilometres west of Peachland, opened in November 2020. (Google maps)
The Okanagan Connector now has a gas station

The highway previously ran for over 117 kilometres without a place to fuel up

The Hughes’ Grinch was stolen from their front yard Wednesday, Dec. 1, 2020. The Santa suit the Grinch is wearing is 50 years old and has sentimental value. It was once worn by April Hughes’ dad. (Hughes photo)
Grinch stolen from Penticton home is ‘irreplaceable’

The Hughes have had a Christmas display for 25 years on Grandy Avenue in Penticton

Midway RCMP’s Cpl. Phil Peters spoke at Greenwood’s city council meeting Monday, Nov. 23. Photo: Laurie Tritschler
B.C. Mountie builds fire to warm suspect with hypothermia prior to rescue

Cpl. Phil Peters said the civilian helped police track, apprehend and eventually rescue the suspect

Premier John Horgan leaves the podium following his first press conference of the year as he comments on various questions from the media in the Press Gallery at B.C. Legislature in Victoria, B.C., on Monday, January 13, 2020. THE CANADIAN PRESS/Chad Hipolito
Revelstoke COVID-19 cluster linked to non-essential travel: Horgan

There have been 46 cases of COVID-19 in the community

Students at Lavington Elementary crammed a car full of non-perishables for those in the community facing food insecurity. Spearheaded by teacher January Peebles (left), the donations were picked up by Give LUCK founder Myrika Godard, who works to connect donors with donees in the North Okanagan. (Give LUCK photo)
Provincial health officer Dr. Bonnie Henry updates B.C.’s coronavirus situation at the legislature, Nov. 30, 2020. (B.C. government)
Hockey team brought COVID-19 back from Alberta, B.C. doctor says

Dr. Bonnie Henry pleads for out-of-province travel to stop

(Jennifer Smith - Morning Star file photo)
Three-car crash ties up Vernon intersection

One person transported by Ambulance for non-life threatening injuries

Most Read