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Inflation is pushing more and more BC residents to the breaking point.

The latest Consumer Debt Index found that 52% of BC residents were $200 or less away from not being able to pay all their bills in June. That’s up 8% from the first quarter of 2023.

“Amid the high cost of living, households are facing a range of financial pressures, leaving minimal wiggle room within their budgets.” Linda Paul, a licensed insolvency trustee with MNP Ltd., which conducted the survey, said in a news release.

“As a result, they risk falling behind on their payments. That’s when bills like credit cards may go past due. When that happens, late fees and interest accrue quickly, which makes it even harder to catch up on payments.” 

The survey found that 70% of BC residents felt their weekly spending on essentials had increased by at least $100 and 27% felt costs went up between $100 and $200 compared to the first quarter of the year.

“While households are trying to curtail discretionary expenses and spend more cautiously, some have exhausted all possibilities of cutting back,” Paul said. “They’ve already swapped to the cheapest grocery store items and cut down on their entertainment costs.

“Despite these measures, they’re still struggling with the essentials like putting food on the table or paying their mortgage or rent. That leaves individuals with difficult choices around which bills to prioritize and which they may have to postpone or forgo.”

The survey found 49% of respondents regret the amount of debt they’ve taken on, up 6% from earlier this year, and 68% say they’re feeling the effects of interest rate hikes.

Last week, the Bank of Canada raised its base rate to 5%, the highest it’s been in more than 20 years. Statistics Canada reported inflation has fallen to 3.4% but that’s still well above the 2% target set by the Bank of Canada.

READ MORE: Canada’s inflation rate falls to 3.4% last month, lowest rate since June 2021

MNP Ltd. is a division of the largest insolvency practice in Canada. It recommends that people contact their creditors if they can’t make their payments on time.

“Falling behind on payments and failing to establish communication or make arrangements with lenders is a sign borrowers need to ask for help,” Paul said in the news release. “In those situations, individuals should also seek out professional help from a Licensed Insolvency Trustee.”

The Credit Counselling Society offers free debt consulting services and can be accessed here.

READ MORE: Struggling to make ends meet? Here are some ways to get help

MNP also has a free online debt assessment tool, here.

The Consumer Debt Index was compiled by Ipsos who contacted 2,000 Canadians between June 1 and June 6.

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