Affordability and debt challenges are keeping Canadians from getting ahead


Affordability is a timely issue. Rising costs of living, stagnate incomes and growing debt loads have left Canadians feeling financially stuck, focused on making ends meet and unable to save for days ahead.

The BDO Canada Affordability Index shows that over half (53%) of Canadians continue to live paycheque-to-paycheque and debt remains overwhelming for 25%. Over a quarter (27%) still don’t have enough for their needs and less than half (42%) have enough money to spend on their wants.

Retirement is a growing concern. During the past year, more Canadians have fallen behind on saving for retirement. Seven-in-10 Canadians (69%) feel that even if they save, it still won’t be enough – an increase of 5% since 2018.

“Affordability and debt challenges continue to weigh on Canadians, and what this year’s Affordability Index reveals is that, over time, the cumulative effects are having a significant and increasingly negative impact on financial goals.”

Doug Jones, President of BDO Canada Limited


Even as household debt continues to hover at record levels in Canada, the Index finds that paying off debt is the top priority for Canadians. More than four-in-10 (43%) say they are slowly paying off their debts.

Unfortunately, Canadians also admit that paying off debt is one of their top challenges. Three-in-10 admit they have delayed paying off credit card balances because they could not afford it.

Credit card debt, which was a serious concern in 2018, is affecting even more Canadian families in 2019. Nearly six-in-10 Canadians (57%) are carrying a balance on their credit cards, compared to 53% in 2018.


“Many people find themselves overly burdened by credit card debt. Credit card companies gladly increase your limit and make it easy for you to carry a balance and accrue interest. But making only the monthly minimum payment is a clear sign of financial stress. The best course of action is to get debt advice sooner rather than later.”

Doug Jones, President of BDO Canada Limited

Compared to our 2018 Affordability Index results, a growing number of Canadians are taking on debt in all forms:

  • 45% have mortgage debt (up 5%)
  • 40% have car loan(s) (up 8%)
  • 32% have line(s) of credit (up 4%)
  • 18% have Home Equity Line(s) of credit (up 6%)
  • 15% have student loan(s) (up 5%)

Four-in-10 Canadians have a non-mortgage debt load of $20,000 and up.


It’s clear from the 2019 Index findings that not all Canadians are equally affected by debt and affordability challenges. Women, Gen Xers (35-54), families and Canadians with lower incomes (less than $50,000) are especially vulnerable and their struggles have increased in the past year.

  • 28% of women find their debt load overwhelming (vs 25% in 2018)
  • 34% of Gen Xers (35-54) struggle to feed their families (vs 29% in 2018)
  • 50% of lower income individuals struggle to pay for essential utilities (vs 46% in 2018)

Compared to men, women continue to experience more difficulty in paying for necessities like food, housing, transportation, utilities and clothing. Their ability to afford these essentials has not improved since last year either.

Since last year, a growing number of women are living paycheque to paycheque (59% vs 54% in 2018) and more admit to having no retirement savings (43% vs 35% in 2018).

As lack of affordability weighs on everyday finances, the most vulnerable groups have trouble adapting to these new challenges.

“The difficulty with reduced affordability is that people have no control over the cost of living. The best course of action is for Canadians to focus on what’s happening with their own families. Revaluate how they are handling their debts and create a budget that they are able to stick to. Having a budget is key for all Canadians. ”

Doug Jones, President of BDO Canada Limited


Despite retirement being top of mind, a growing number of Canadians are not well prepared, even those approaching their retirement years. More non-retirees (39% compared to 31% in 2018) have no retirement savings, including nearly one third (32%) of boomers and seniors.

Among non-retirees who have no retirement savings, the top reasons are:

  • Can’t afford it (38%)
  • Need to pay off debts first (17%)
  • Need to save for other things first (8%)
  • Too young to start thinking about retirement (6%)


Those who haven’t yet retired have grown increasingly pessimistic in the past year:

  • Eight-in-10 (82%) think they’ll need to work longer than their parents (up 7% since 2018)
  • Almost three-quarters (73%) blame cost of living for not being able to save for retirement (up 4% since 2018)
  • Seven-in-10 (69%) say that even if they save they still won’t have enough (up 5% since 2018)
  • Nearly seven-in-10 (68%) are concerned about having enough money to make it through retirement (up 3% since 2018)

The retirement outlook for Gen Xers isn’t getting better.

Four-in-10 Gen Xers (38%) admit they have no retirement savings (compared to 33% in 2018). Almost half (47%) say they can’t afford to save for retirement because of rising living costs, and 19% say they need to pay debts off first.

Gen Xers’ lack of retirement savings can be linked, in part, to their debt loads. This age group continues to be the most indebted generation. Among the 75% of Gen Xers with debt, six-in-10 (59%) carry a credit card balance and over half (55%) have a mortgage (vs 38% of millennials and boomers/seniors).

Nearly one-in-four (23%) indebted Gen Xers have between $20,000 and $40,000 in non-mortgage debt.

“An increasing number of Canadians in their 40s and 50s are financially stretched and unprepared for retirement and unexpected costs. This can lead to a greater reliance on debt to support living expenses.”

Doug Jones, President of BDO Canada Limited


While the majority of Canadians are able to get by, it’s housing and planning for the future that they find the most challenging.

Saving for a home and retirement or paying down a mortgage are often top of mind when Canadians prioritize their finances. But when faced with inflated housing markets and rising costs of living, these priorities become challenges that vary from generation to generation.


In each demographic, debt obligations play an important role. Debt makes it harder for Canadians to achieve all their goals. Financial priorities have to compete with each other.

“When families cannot afford a home down payment or struggle to make the mortgage payment each month, it affects the whole financial outlook of a household. There is often a give-and-take between immediate and long- term priorities. It’s a complicated juggling act that can be very stressful, especially as people age and realize they’re behind in their retirement saving and still have debt obligations.”

Doug Jones, President of BDO Canada Limited


Owning a home is still a priority for most Canadians. Many families have taken on extremely high mortgages that further compress their ability to save for the future.

If the financial outlook for Canadians with children has worsened this year compared to last, home ownership has increased (70% are homeowners, up 7% from last year).

Compared to 2018 Affordability Index results, more families are delaying paying off their mortgage (19%, up 6%) and their credit cards (39%, up 7%). And home renovations and repairs have become a high priority for one-third (33%) of Canadian households with kids (up 14%).

Reduced affordability is also keeping many non-owners from buying their first home. The majority of Canadians (72%) who don’t own a home are unlikely to purchase a home in the near future due to personal debts, rising costs of living and overpriced housing markets.


Canadians have increasingly made sacrifices over the past two years, delaying needs and wants because of reduced affordability:

  • Buying essentials, food or healthcare products (15%)
  • Paying essential utilities, hydro, phone, gas, etc. (13%)
  • Retiring when they thought they would (17%, up 4% since 2018)
  • Having children (8%)
  • Buying a car (28%, up 5% since 2018)
  • Taking a vacation (51%, up 9% since 2018)

Putting off a vacation or the purchase of a new vehicle may be necessary sacrifices for avoiding debt. But delaying basic needs is a clear sign of financial distress. In these situations, it’s critically important for Canadians to seek help for managing their debt as soon as possible.


Half of Canadians rate their financial readiness for unexpected costs as “poor” or “terrible”. The majority (56%) rate their financial readiness for retirement as “poor” or “terrible”.

It’s concerning that Canadians appear to be financially unfit for the future. And debt is often the obstacle impeding financial readiness, making many of life’s milestones challenging to afford.


For those who are still struggling, there is good news.

“With a strong plan to help them manage their debt, created with the advice of a trusted professional, Canadian families have the power to improve their financial readiness. For those with unmanageable debt, a Licensed Insolvency Trustee can help them understand their options and become more financially prepared for the future.”

Doug Jones, President of BDO Canada Limited


Due to increasing affordability challenges, many Canadians will be forced to carry debt into their later years.
A big part of the problem is that incomes have not kept up with the cost of living. Many aren’t earning enough to reduce their debt burden.


Long-term security and financial wellness are harder to realize. Heavy debt loads overwhelm a household’s finances and leave them financially unprepared. While affordability challenges aren’t solely linked to too much debt, the findings of the BDO Canada Affordability Index show that debt is a major factor.

“It’s critically important that Canadians—especially those who are carrying a lot of debt—take steps to manage their debt before it compromises future financial stability.”

Doug Jones, President of BDO Canada Limited


BDO Canada Limited has 66 Licensed Insolvency Trustees (LITs) across the country to help Canadians work through their debt and find the best solution. LITs are the only professionals able to assist Canadians who wish to file a consumer proposal or bankruptcy.

Find an LIT near you

About the BDO Canada Affordability Index

In partnership with BDO Canada, Angus Reid Global conducted an online survey from August 7-13, 2019, among a representative randomized sample of 2,047 Canadian adults who are members of the Angus Reid Forum. For comparison purposes only, a probability sample of this size with this sample plan would carry a margin of error of +/-2.2 percentage points, 19 times out of 20. Discrepancies in or between totals are due to rounding.

Licensed Insolvency Trustees Since 1958