February 15, 2024

Why seasonal workers face increased risks of debt and what they can do about it

Seasonal workers face numerous challenges, but financial instability is often the greatest. We look at how seasonal workers can achieve financial stability here.

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Why seasonal workers face increased risks of debt and what they can do about it

A seasonal workers' truck with a snowplow attached sits parked

Seasonal workers face several financial challenges, in an already financially challenging time. We all know the cost of living has risen in the past few years, but seasonal workers feel that increase more than others.

Seasonal work is exactly what it sounds like. Seasonal. Once the work season ends, so does the work and the paycheque that comes with it. So how can seasonal workers protect themselves from financial hardship? We spoke to BDO Licensed Insolvency Trustee Kim Burke to find out.

Seasonal work in Canada at a glance

You might be surprised to learn just how key seasonal workers are to Canada’s economy. The tourism, fishing and agriculture industries are all heavily reliant on seasonal workers.

Almost half (49.9%) of all those working in the in the agriculture sector in 2021 were seasonal workers, according to Statistics Canada.

In 2022 over 70,000 people seasonal workers were employed in Canada’s agricultural industry and another 36,000 temporary foreign workers worked in food and beverage manufacturing, Statistics Canada noted.

These aren’t the only kinds of jobs that are seasonal though. Think of the extra staff many retail stores hire during the holiday season. Those are all seasonal workers too.

The number of job postings for seasonal holiday jobs in Canada fell by 30% in 2023, said job posting site Indeed in a report.

However, while the number of job postings fell, the report also showed job seekers in Canada are increasingly looking for seasonal holiday work. Job searches including seasonal terms jumped from 2.1 searches per thousand Canadian job seeker searches in 2022, to 2.4 per thousand searches in 2023.

Struggling to keep up with bills?

What factors affect seasonal workers?

Those who work seasonally face financial instability due to the nature of the industry they’re employed in. There’s a real lack of job security and with that comes an inconsistent income, as previously mentioned. Kim Burke, a Licensed Insolvency Trustee at BDO says that’s far from the only challenge seasonal workers face though, others include:

  • Unemployment in the off season:  This can lead to financial instability and difficulty in making ends meet
  • Cost of Living:  The cost of living has risen dramatically in recent years. Affordable housing is next to impossible to find for many seasonal workers and many may struggle to afford groceries and utilities on top of rent
  • Low annual salary:  Many workers may only make an hourly wage or may make a set salary for a certain period. This makes it more difficult to budget and plan ahead
  • Lack of benefits:  Many seasonal workers do not have access to paid time off, prescription drug plans or retirement plans
  • Mental Health:  The stress of financial instability and lack of job security can be significant
  • Dependency on Government Programs:  Many seasonal workers rely government programs, such as employment insurance (EI), in the off season, which can put an added strain on their financial resources

While seasonal workers face an uphill battle, all is not lost; there are ways for anyone doing this type of work to begin to build their finances.

How to improve finances as a seasonal worker

Achieving financial stability while working seasonally is not easy, but it is not impossible. Here’s some ways that seasonal workers can improve their overall financial health.

Build an emergency fund

An emergency fund should have enough money to cover three to six months of spending. While you're employed, it's best to start creating an emergency fund.

It’s something that Kim Burke, a BDO Licensed Insolvency Trustee knows can be a real challenge for seasonal workers
“It may not be possible for everyone, but you really should try to save something every month even if it’s a very small amount.”

Kim suggests those use Employment Insurance to get by in the off season set up automatic transfers to their savings account on payday, each month, at times when they are working, “that way you’re paying yourself first and the money is set aside for times when you are not working.”

Remember, an emergency fund does not have to be created all at once; you can decide to put aside a certain amount of money for each paycheque and slowly build your savings.

Create a budget

If you’ve never created a budget, it can feel like a daunting task. It’s not as hard as it may seem, however.

A budget allows you to track your spending and see where you’re overspending and need to cut back. The simplest way to do this is to go back through your purchase with your banking app or online and subtract the amount from your income. From there, you can see if you’re spending more than you make.

It’s important to be honest about your expenses when creating a budget says Kim Burke, a BDO Licenced Insolvency Trustee.

“Some people put estimates in their budget but if you’re spending $150 on electricity and you only budgeted $100 it will have a cascading affect on your finances overall.”

If you want a slightly more complex way, we’ve collected the pros and cons of five different budgeting methods. These budgets can help you allocate a certain amount of money for needs (housing, food, utilities, etc.) and wants (a night out, entertainment, travel, etc.).

“It is important to remember that your budget doesn’t have to be the same every month,” says Kim.

Creating a budget is something all seasonal workers should do for both the times when they are working and when they aren’t. You’ll essentially have two budgets that help guide spending depending on whether you’re working or between jobs.

Seek temporary or part-time employment in the off season

When seasonal work ends, the money also stops, and that’s a huge problem for many who work seasonally.

Probably the best way to increase savings is to increase income. We know this option is not always possible for everyone, but for those who can increase their workload, it’s a great opportunity.

Part-time work can come in many forms. Traditionally, it might mean a few shifts a week at a retail or grocery store, and those are still great options.

But now it can also mean gig work, where you choose when to work and for how long. This can mean driving for a rideshare or food delivery. It may also mean teaching private music lessons or tutoring as well.

What if your financial difficulties are too much?

Licensed Insolvency Trustee’s like Kim help people who are struggling with debt, but they do more than just address the current issue”

“When someone comes to us, we of course help them with their current financial trouble, but we also help them understand what they need to do going forward to avoid it happening again,” says Kim.

If you’re struggling financially as a seasonal worker there are help and options available to you. A Licensed Insolvency Trustee can review your situation and help you find the solution for you to become debt-free.

We offer a free consultation to provide this information to you and it can be done in under an hour. We’re here to help all those that need it.

Do you have more questions?

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February 15, 2024

Why seasonal workers face increased risks of debt and what they can do about it

Seasonal workers face numerous challenges, but financial instability is often the greatest. We look at how seasonal workers can achieve financial stability here.

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