Why Are Canadians Struggling So Much With Debt?

Debt has become a pervasive issue in Canada, with many Canadians facing significant challenges in managing their personal finances. Mounting debt levels have become a pressing concern, impacting individuals, families, and the overall economy.

But why are Canadians struggling so much with debt? This blog aims to delve into the factors contributing to this issue. From economic and societal factors to government policies, various elements have come together to create a perfect storm of debt in Canada.

In this blog, we will explore the key reasons behind Canadians’ debt struggles, shedding light on the complex interplay of economic, societal, and government factors that have contributed to this pervasive issue.

Understanding these factors is crucial in order to address the root causes of the problem and pave the way towards better financial well-being for Canadians.

Why Are Canadians Struggling So Much With Debt?

Canadians are struggling with debt for several reasons. One major factor is the increasing cost of living and stagnant wage growth. Despite the rising costs of housing, education, healthcare, and other essential expenses, wages have not kept pace, leading many Canadians to rely on credit to cover their basic needs. This has resulted in a cycle of debt, as individuals and households accumulate debt to bridge the gap between their income and expenses.

Another factor is the normalization of debt in Canadian culture and easy access to credit. The availability of credit cards, loans, and other forms of debt has made it convenient for Canadians to borrow beyond their means, leading to higher debt levels. Consumerism and the pressure to meet societal expectations and materialistic desires have also played a role, encouraging overspending and lifestyle inflation, which further contribute to debt struggles.

Lack of financial literacy is another key factor. Many Canadians lack the necessary knowledge and skills to effectively manage their personal finances, including budgeting, saving, investing, and managing debt. This can result in poor financial decision-making, mismanagement of debts, and the inability to effectively navigate the complex world of personal finance, leading to debt challenges.

Social norms around borrowing have also influenced Canadian’s borrowing behavior. The belief that debt is a normal part of life and borrowing for non-essential items is acceptable has contributed to the accumulation of debt. Moreover, lenient credit regulations and loose lending practices by financial institutions in Canada have made it easier for individuals to borrow beyond their means, leading to higher levels of debt.

Government support programs, such as student loans and mortgage lending policies, while intended to provide support, may inadvertently contribute to debt struggles. Easier access to credit without adequate financial education or accountability measures can result in individuals accumulating debt without fully understanding the long-term implications.

Additionally, the absence of robust debt relief measures, such as bankruptcy laws or debt forgiveness programs, can further exacerbate Canadians’ debt burdens. The lack of options for managing and reducing debt can prolong the debt cycle and hinder individuals’ ability to achieve financial stability.

Overall, Canadians are struggling with debt due to a combination of factors, including stagnant wage growth, easy access to credit, consumer culture, lack of financial literacy, social norms around borrowing, lenient credit regulations, and the absence of robust debt relief measures. Addressing these underlying issues requires a comprehensive approach that includes policy changes, financial education, responsible borrowing practices, and the availability of viable debt relief options. By addressing these factors, Canadians can have better opportunities to manage their debts, achieve financial stability, and improve their overall financial well-being.

Economic Factors

High Cost Of Living

The cost of living in Canada has been steadily on the rise, making it increasingly challenging for Canadians to manage their day-to-day expenses and save for the future. Several factors have contributed to the mounting financial burden faced by many Canadians.

1. Housing: One of the major contributors to the high cost of living in Canada is the skyrocketing prices of housing. Cities like Toronto and Vancouver have experienced an unprecedented surge in housing prices, leading to exorbitant rents and unaffordable home prices. As a result, many Canadians are forced to spend a significant portion of their income on housing, leaving little room for savings or other expenses.
2. Healthcare: Healthcare costs in Canada have also been on the rise, impacting Canadians’ finances. While Canada’s healthcare system is often lauded for its universal coverage, it does not cover all healthcare expenses, such as prescription medications, dental care, and mental health services. These out-of-pocket costs can quickly add up, especially for those without comprehensive health insurance, leading to financial strain and debt.
3. Education: The cost of education, including post-secondary tuition fees, textbooks, and living expenses, has also risen significantly in Canada. Many Canadian students graduate with significant student loan debt, which can take years to repay, further impeding their ability to manage expenses and save for the future.
4. Other Basic Necessities: Basic necessities, such as groceries, transportation, and utilities, have also become more expensive in Canada. The rising costs of everyday essentials put additional pressure on Canadians’ budgets, making it harder for them to accumulate savings and build financial stability.

The combination of these high costs of housing, healthcare, education, and other basic necessities has created a challenging financial landscape for many Canadians. It has become increasingly difficult to manage day-to-day expenses, let alone save for the future, resulting in a higher reliance on credit and increased levels of debt.

Overall, the high cost of living in Canada, driven by the rising costs of housing, healthcare, education, and other basic necessities, has significantly impacted Canadians’ ability to manage their expenses and accumulate savings. Addressing these economic challenges is crucial in order to mitigate the burden of debt faced by many Canadians and promote financial well-being for individuals and families alike.

Stagnant Wage Growth

While the cost of living in Canada has been steadily increasing, wage growth has not kept pace, leaving many Canadians grappling with financial challenges. Stagnant wage growth has made it difficult for Canadians to cope with the rising costs of housing, healthcare, education, and other essential expenses, leading to increased reliance on credit to cover their day-to-day expenses.

1. Wage Stagnation: Despite a growing economy, wage growth in Canada has been stagnant for many Canadians. Real wages (adjusted for inflation) have not increased significantly, resulting in decreased purchasing power and financial strain for workers. Many Canadians find themselves struggling to keep up with the rising costs of living, as their wages have not kept pace with inflation, making it challenging to make ends meet.
2. Rising Costs of Living: As mentioned earlier, the cost of housing, healthcare, education, and other basic necessities has been on the rise in Canada. However, with stagnant wage growth, Canadians are finding it increasingly difficult to afford these essential expenses without resorting to credit or dipping into savings. This has led to a higher reliance on credit cards, loans, and other forms of borrowing to cover everyday expenses, resulting in increased debt burdens.
3. Financial Stress and Inequality: Stagnant wage growth has also exacerbated financial stress and inequality among Canadians. Many workers, particularly those in low-paying jobs, are struggling to meet their basic needs, such as housing, healthcare, and education, while also trying to repay debts. This financial strain can lead to a cycle of debt and perpetuate income inequality, as those with lower wages find it harder to build savings and wealth.
4. Impact on Savings and Retirement: Stagnant wage growth has also taken a toll on Canadians’ ability to save for the future and plan for retirement. With limited disposable income and increased reliance on credit, many Canadians are unable to save enough to build a solid financial foundation or invest in retirement savings. This can lead to financial insecurity in the long run, as Canadians may face challenges in meeting their retirement goals and maintaining a comfortable standard of living in their later years.

Overall, stagnant wage growth has created financial challenges for many Canadians, as wages have not kept up with the rising costs of living. This has resulted in increased reliance on credit to cover expenses, financial stress, inequality, and challenges in savings and retirement planning. Addressing the issue of wage stagnation is crucial to ensure that Canadians can keep up with the rising costs of living, build savings, and achieve financial stability.

Increased Reliance On Credit

The easy availability of credit and the normalization of debt in Canadian culture have contributed to a significant increase in borrowing, resulting in higher debt levels for individuals and households across the country. With credit cards, loans, and other forms of borrowing readily available, many Canadians have fallen into a cycle of debt, struggling to manage their financial obligations and accumulating debt burdens.

1. Easy Access to Credit: Over the years, credit has become easily accessible to Canadians, with financial institutions offering credit cards, personal loans, and other forms of borrowing with minimal requirements. This easy access to credit has made it convenient for Canadians to finance their purchases and expenses, leading to increased reliance on borrowing to meet their financial needs. However, this convenience has also led to many Canadians accumulating debt without fully understanding the long-term financial consequences.
2. Normalization of Debt: Debt has become normalized in Canadian culture, with many individuals and households accepting debt as a common part of their financial lives. High consumer debt levels, such as credit card debt, car loans, and student loans, have become socially accepted, and there is less stigma associated with being in debt. This normalization of debt has contributed to a mindset where borrowing has become a common way to fund lifestyles, emergencies, and even investments, leading to higher debt levels for individuals and households.
3. Impact on Financial Health: The increased reliance on credit has had significant consequences on the financial health of Canadians. Many individuals and households find themselves struggling with debt repayments, high interest rates, and fees, leading to financial stress and reduced ability to save or invest for the future. This can also negatively impact credit scores, making it harder to access credit in the future or qualify for favorable terms, further exacerbating the cycle of debt.
4. Long-term Consequences: The normalization of debt and increased reliance on credit can have long-term consequences on individuals and households in Canada. Accumulating high levels of debt can hinder one’s ability to build wealth, invest in education, purchase a home, or save for retirement. It can also impact mental health, relationships, and overall financial well-being. Breaking free from the cycle of debt and managing credit responsibly is crucial for individuals and households to achieve financial stability and long-term financial success.

Overall, the easy access to credit and the normalization of debt in Canadian culture have contributed to increased borrowing and higher debt levels for individuals and households. It is important for Canadians to understand the long-term consequences of debt and manage credit responsibly to avoid falling into a cycle of debt and achieve financial stability. Financial education, budgeting, and responsible credit management are essential tools to overcome the challenges associated with increased reliance on credit in Canada.

Societal Factors

Consumer Culture

Consumerism and the societal pressure to keep up with materialistic expectations have played a significant role in Canadians accumulating debt through overspending and lifestyle inflation. The culture of consumerism, where individuals are encouraged to constantly acquire and consume material goods, combined with the pressure to maintain a certain lifestyle, has led many Canadians to rely on credit to fund their spending habits, resulting in increased debt levels.

1. Materialistic Expectations: In today’s consumer culture, there is often an expectation to acquire and display material possessions as a status symbol or to fit in with societal norms. The pressure to keep up with materialistic expectations, such as owning the latest gadgets, wearing trendy clothing, or driving expensive cars, can lead individuals to overspend and accumulate debt in order to maintain a certain lifestyle. This pressure to conform to materialistic expectations can result in impulsive spending, buying beyond one’s means, and relying on credit to finance these purchases.
2. Overspending: Overspending is a common issue in consumer culture, where individuals may feel the need to constantly purchase new items or indulge in unnecessary expenses. The ease of online shopping, credit card usage, and buy-now-pay-later options further encourage impulsive spending, leading to a cycle of overspending and accumulating debt. Many Canadians may not have a solid understanding of their financial limitations or fail to budget properly, resulting in spending beyond their means and relying on credit to bridge the gap.
3. Lifestyle Inflation: Lifestyle inflation refers to the tendency to increase spending as income increases, often resulting in higher expenses and increased debt levels. In a consumer-driven society, there is often a desire to upgrade one’s lifestyle and indulge in luxury items or experiences as income rises. This can lead to higher spending on housing, dining out, travel, and other discretionary expenses, resulting in increased debt levels as individuals strive to maintain a certain lifestyle without considering their long-term financial health.
4. Financial Literacy: Lack of financial literacy can also contribute to Canadians accumulating debt through overspending and lifestyle inflation. Many individuals may not have a solid understanding of budgeting, savings, and responsible credit management, leading to poor financial decision-making and reliance on credit to fulfill materialistic expectations or lifestyle desires. The lack of financial education can result in individuals not fully comprehending the consequences of accumulating debt and the impact it can have on their long-term financial well-being.

Overall, consumer culture and the pressure to keep up with materialistic expectations have contributed to Canadians accumulating debt through overspending and lifestyle inflation. It is essential for individuals to develop financial literacy, budget effectively, and make responsible spending decisions to avoid falling into the trap of consumer-driven debt. Understanding the long-term consequences of overspending and lifestyle inflation, and managing credit responsibly, is crucial for individuals to achieve financial stability and avoid unnecessary debt burdens.

Lack Of Financial Literacy

Financial literacy, or the knowledge and understanding of personal finance and money management, is a critical skill for individuals to make informed financial decisions and effectively manage their money. However, many Canadians lack sufficient financial education, leading to poor financial decision-making and debt mismanagement, which can contribute to their struggles with debt.

1. Limited Financial Education: The education system in Canada often lacks comprehensive financial literacy programs, leaving individuals without the necessary knowledge and skills to manage their personal finances. Many Canadians may not have received formal education on budgeting, saving, investing, credit management, and other essential financial concepts. As a result, they may lack the awareness and understanding of how to effectively manage their money, make informed financial decisions, and avoid debt pitfalls.
2. Misunderstanding of Credit and Debt: A lack of financial literacy can also result in misunderstandings about credit and debt. Many Canadians may not fully comprehend the consequences of borrowing money, the impact of interest rates, and the long-term implications of debt accumulation. This can lead to poor debt management practices, such as overspending on credit cards, taking on high-interest loans, and failing to prioritize debt repayment. Without proper financial education, individuals may not have the necessary tools to navigate the complexities of credit and debt, leading to unmanageable debt levels.
3. Limited Budgeting and Saving Skills: Budgeting and saving are fundamental aspects of personal finance, but many Canadians may lack the skills to effectively budget and save their money. Without a proper budgeting plan, individuals may struggle to manage their expenses, leading to overspending and relying on credit to cover gaps. Additionally, inadequate saving habits can result in financial emergencies or unexpected expenses becoming debt burdens. Lack of financial literacy can contribute to poor budgeting and saving practices, making it challenging for Canadians to manage their finances effectively and avoid unnecessary debt.
4. Influence of Predatory Lending: The lack of financial literacy can also make individuals vulnerable to predatory lending practices. Predatory lenders often target individuals with limited financial knowledge, offering high-interest loans, payday loans, and other types of credit with unfavorable terms. Without the necessary understanding of interest rates, fees, and repayment terms, individuals may fall into the trap of predatory lending, resulting in debt that becomes difficult to manage.

Overall, the lack of financial literacy has contributed to poor financial decision-making and debt mismanagement among Canadians. It is crucial for individuals to have access to comprehensive financial education and develop the necessary knowledge and skills to effectively manage their personal finances. By understanding the implications of credit and debt, budgeting effectively, and making informed financial decisions, Canadians can better manage their money, avoid unnecessary debt, and achieve financial stability.

Social Norms Around Borrowing

Societal attitudes and cultural norms can have a significant impact on individuals’ financial behaviors, including borrowing habits. In Canada, certain social norms around borrowing have influenced how Canadians perceive and manage debt, leading to high levels of debt accumulation.

1. Normalization of Debt: In Canadian culture, there is often a normalization of debt as a regular part of life. Many Canadians view borrowing as a means to finance various aspects of their lives, including education, housing, and even non-essential items such as vacations or luxury purchases. The belief that debt is a common and acceptable way to fund these expenses can lead to a mindset where borrowing becomes a norm, rather than a carefully considered financial decision. This normalization of debt can contribute to Canadians taking on more debt than they can manage, leading to financial struggles and debt accumulation.
2. Pressure to Conform to Materialistic Expectations: There is often societal pressure to keep up with materialistic expectations, such as owning a home, driving a certain car, or having the latest gadgets. This pressure can lead Canadians to feel the need to borrow in order to meet these expectations, even if it means going into debt. The desire to conform to societal standards and maintain a certain lifestyle can result in overspending and accumulating debt to fund these materialistic expectations.
3. Lack of Financial Transparency: In some cases, there may be a lack of transparency around the true cost of borrowing, including interest rates, fees, and long-term implications. Financial institutions and lenders may use complex financial jargon or advertise borrowing as an easy and convenient solution without fully disclosing the potential risks and consequences of debt. This lack of transparency can lead to individuals underestimating the true cost of borrowing and accumulating debt without fully understanding the financial implications.
4. Limited Financial Planning and Goal Setting: Some Canadians may lack comprehensive financial planning and goal setting, which can lead to borrowing without a clear understanding of how it fits into their overall financial plan. Without a strategic approach to managing their finances, individuals may rely on borrowing as a short-term solution without considering the long-term impact on their financial well-being. This lack of financial planning and goal setting can contribute to debt accumulation and financial challenges in the future.

Overall, societal attitudes towards borrowing, including the normalization of debt, pressure to conform to materialistic expectations, lack of financial transparency, and limited financial planning, have influenced Canadians’ borrowing behavior and contributed to high levels of debt. It is essential for individuals to critically evaluate their borrowing decisions, understand the true cost of debt, and prioritize financial planning and goal setting to avoid unnecessary debt accumulation and achieve long-term financial stability.

Government Policies

Credit Regulations

The regulatory environment and lending practices of financial institutions play a significant role in shaping borrowing behaviors and debt levels in Canada. Over the years, lenient credit regulations and loose lending practices have contributed to Canadians accumulating high levels of debt, leading to financial challenges for many individuals and households.

1. Easy Access to Credit: In Canada, credit is often readily available and easily accessible to consumers. Financial institutions offer various types of credit, such as credit cards, lines of credit, and personal loans, with relatively low barriers to approval. This easy access to credit can tempt individuals to borrow beyond their means and accumulate debt without fully considering their ability to repay. Furthermore, the convenience of online applications and pre-approved credit offers can make borrowing seem like a simple and convenient solution, leading to impulsive borrowing decisions and debt accumulation.
2. High Debt-to-Income Ratio: The debt-to-income ratio, which is the ratio of an individual’s debt payments to their income, has been on the rise in Canada. This indicates that Canadians are taking on more debt relative to their income levels. Lenient credit regulations and loose lending practices have allowed individuals to borrow larger amounts, often beyond their capacity to repay based on their income. This has resulted in a high debt-to-income ratio, making it challenging for Canadians to manage their debt payments and accumulate savings.
3. Low Interest Rates: In recent years, Canada has experienced historically low interest rates, which have made borrowing more affordable. Low interest rates can entice individuals to borrow more, as the cost of borrowing appears lower in the short term. However, when interest rates eventually rise or when individuals are faced with unexpected financial challenges, the affordability of debt can quickly change, leading to difficulties in repayment and debt accumulation. Loose lending practices by financial institutions, combined with low interest rates, can create an environment where individuals may be approved for larger amounts of credit than they can realistically afford.
4. Lack of Stringent Lending Criteria: Lenient lending criteria by financial institutions can contribute to Canadians accumulating high levels of debt. Some financial institutions may have relaxed lending standards, such as lower credit score requirements, minimal documentation, and higher debt-to-income ratios, to attract more borrowers. This can result in individuals obtaining credit even if they may not have a strong financial foundation or the ability to repay the debt. Lack of stringent lending criteria can lead to individuals taking on debt that they are unable to manage, resulting in financial challenges and debt accumulation.

Overall, lenient credit regulations and loose lending practices by financial institutions in Canada have contributed to Canadians accumulating high levels of debt. It is crucial for individuals to carefully assess their borrowing decisions, consider their ability to repay, and understand the long-term implications of debt. Additionally, policymakers and financial institutions need to ensure responsible lending practices, including stringent lending criteria, to prevent individuals from taking on excessive debt that can lead to financial struggles and debt accumulation.

Government Support Programs

Government support programs, such as student loans and mortgage lending policies, are designed to provide financial assistance to Canadians for education and homeownership. While these programs aim to promote access to education and affordable housing, they may have inadvertently contributed to Canadians’ debt struggles by enabling easier access to credit without adequate financial education or accountability measures.

1. Student Loans: In Canada, student loans are a common form of government support for post-secondary education. While these loans provide financial assistance to students pursuing higher education, they can also lead to significant debt burdens. Many students rely on loans to cover tuition fees, living expenses, and other costs associated with their education. However, without adequate financial education or accountability measures, students may not fully understand the long-term implications of borrowing, including interest rates, repayment terms, and the impact on their future financial well-being. As a result, students may accumulate substantial debt during their studies, and upon graduation, they may face challenges in repaying their loans, leading to financial struggles and debt accumulation.
2. Mortgage Lending Policies: In Canada, mortgage lending policies, such as the availability of longer amortization periods and lower down payment requirements, have made it easier for Canadians to enter the housing market. However, these policies can also lead to increased borrowing and higher levels of debt. Longer amortization periods, for example, may lower monthly mortgage payments, but can result in higher interest costs over the life of the mortgage. Lower down payment requirements can also allow individuals to enter the housing market with minimal savings, leading to higher mortgage debt relative to their income levels. Without adequate financial education or accountability measures, borrowers may not fully understand the risks and responsibilities associated with homeownership and mortgage debt, which can contribute to debt struggles.
3. Lack of Financial Education and Accountability Measures: Government support programs often provide credit to Canadians without requiring adequate financial education or accountability measures. For instance, student loans are often approved without thoroughly assessing the borrower’s financial literacy or ability to repay. Similarly, mortgage lending policies may not mandate financial education or strict affordability assessments, which can result in borrowers taking on debt without fully understanding the implications or risks involved. This lack of financial education and accountability measures can lead to individuals accumulating debt without proper financial planning, budgeting, or understanding of the consequences, resulting in debt struggles down the road.
4. Need for Enhanced Financial Education and Accountability: To address the issue of debt struggles related to government support programs, there is a need for enhanced financial education and accountability measures. Financial literacy programs can be integrated into student loan programs and mortgage lending policies to ensure borrowers have a solid understanding of their financial responsibilities, including budgeting, debt management, and long-term financial planning. Accountability measures, such as stricter affordability assessments, can be implemented to ensure that borrowers are not taking on excessive debt that they cannot afford to repay. These measures can help individuals make informed borrowing decisions, manage their debt responsibly, and avoid debt struggles in the future.

Overall, government support programs, such as student loans and mortgage lending policies, may have inadvertently contributed to Canadians’ debt struggles by enabling easier access to credit without adequate financial education or accountability measures. It is essential for policymakers to prioritize financial literacy and accountability in these programs to ensure that borrowers are well-informed, financially responsible, and able to manage their debt effectively. This can help individuals avoid excessive debt burdens and mitigate the challenges associated with debt accumulation.

Lack Of Debt Relief Measures

The absence of robust debt relief measures in Canada, such as bankruptcy laws or debt forgiveness programs, can exacerbate Canadians’ debt burdens and hinder their ability to achieve financial stability. Debt relief measures are designed to provide individuals and households with options for managing and reducing their debt when faced with financial challenges. The lack of such measures can result in prolonged debt burdens, financial stress, and difficulties in achieving financial stability.

1. Bankruptcy Laws: Bankruptcy is a legal process that allows individuals or businesses to seek relief from their debts and start fresh financially. In Canada, the bankruptcy laws are complex and can be difficult to navigate. The requirements for filing bankruptcy, the duration of the process, and the consequences of bankruptcy can vary depending on the province or territory. Moreover, bankruptcy can have long-term impacts on credit scores, employment opportunities, and financial reputation, which may deter individuals from considering it as a viable option. The absence of clear and accessible bankruptcy laws can leave individuals with limited options for resolving their debt issues, resulting in prolonged debt burdens and financial struggles.
2. Debt Forgiveness Programs: Debt forgiveness programs, also known as debt relief or debt settlement programs, are designed to provide individuals with options for negotiating and reducing their debt burden. These programs typically involve negotiating with creditors to lower the amount of debt owed, often in exchange for a lump sum payment or a structured payment plan. However, the availability and effectiveness of debt forgiveness programs in Canada may vary, and not all creditors may be willing to participate. The absence of robust and widely accessible debt forgiveness programs can leave individuals with limited options for negotiating and reducing their debt, making it harder for them to overcome their debt burdens and achieve financial stability.
3. Consequences of Prolonged Debt Burdens: Without robust debt relief measures, individuals and households facing significant debt burdens may face several consequences. Prolonged debt burdens can result in financial stress, mental health issues, strained relationships, and decreased quality of life. Debt burdens can also hinder individuals’ ability to save, invest, and achieve long-term financial goals, such as homeownership, retirement, or education. Additionally, the lack of debt relief measures can disproportionately impact vulnerable populations, such as low-income individuals, marginalized communities, and those facing unexpected financial hardships, further perpetuating financial inequality.
4. Importance of Debt Relief Measures: Debt relief measures play a crucial role in helping individuals and households manage their debt burdens and achieve financial stability. Bankruptcy laws and debt forgiveness programs provide options for individuals to reduce their debt, negotiate with creditors, and obtain a fresh financial start. These measures can provide relief from overwhelming debt burdens, enable individuals to regain control of their finances, and work towards rebuilding their financial well-being. Moreover, debt relief measures can promote financial inclusion, reduce financial stress, and contribute to overall economic stability.

Overall, the absence of robust debt relief measures, such as bankruptcy laws or debt forgiveness programs, in Canada can further exacerbate Canadians’ debt burdens and hinder their ability to achieve financial stability. It is crucial for policymakers to prioritize the availability and accessibility of debt relief measures to provide individuals and households with viable options for managing their debt and overcoming financial challenges. By implementing effective debt relief measures, Canadians can have better opportunities to achieve financial stability and improve their overall financial well-being.

Conclusion

In conclusion, Canadians are struggling with debt for a variety of reasons, including a lack of financial literacy, high living costs, and easy access to credit. These factors have contributed to the accumulation of personal debt at unprecedented levels, putting many Canadians in a precarious financial situation.

The first step in addressing this issue is to increase financial literacy and provide individuals with the knowledge and tools they need to manage their finances effectively. This could involve initiatives such as financial education programs in schools, more transparent information about financial products and services, and accessible resources for those seeking help with their debt.

In addition, there needs to be a greater focus on addressing the root causes of high living costs, such as affordable housing, access to healthcare, and fair wages. By addressing these underlying issues, Canadians can better manage their financial situations and avoid the temptation of taking on excessive debt to make ends meet.

Finally, it is essential to regulate and monitor the credit industry to ensure that consumers are not being taken advantage of. This could involve stricter lending practices and greater transparency in credit reporting to prevent individuals from falling into debt traps that can be difficult to escape.

Overall, the issue of debt in Canada is a complex one that requires a multi-faceted approach to address effectively. By increasing financial literacy, addressing the root causes of high living costs, and regulating the credit industry, Canadians can better manage their finances and avoid the devastating consequences of excessive debt.