Nearly 40 per cent of Canadians didn't have enough money to cover household expenses at least once in the last 12 months, according to results of a new survey that suggests housing costs are putting increased pressure on homeowners' finances.
A debt survey released by Manulife Bank of Canada on Thursday, showed 38 per cent of respondents were "caught short" in the past year and had to cover expenses by accessing a line of credit, borrowing on a high interest credit card or borrowing money from a family member.
"The challenge faced by many Canadians is that their income is relatively stable from month-to-month, but their expenses can vary significantly," Manulife Bank of Canada President and CEO Rick Lunny said in a news release.
While many Canadians have scrambled to pay the bills, the survey showed 73 per cent of homeowners say they would be able to handle unexpected costs, such as a furnace replacement or car repair.
However, the level of Canadians' "rainy-day" savings suggests they may be less prepared than they think to deal with an emergency.
Fewer than one in four homeowners have more than $5,000 set aside for an emergency, while about half of those surveyed indicated they either have $1,000 or less, or didn't know how much money they had set aside for emergencies.
"About 70 per cent of Canadians are saying they feel prepared to meet those expenses, but in reality, they're not," Jason Daly, Manulife's vice president of product, marketing and business development, told CTV News Channel on Thursday.
Daly said the "unaffordability" of housing in some communities is putting a strain on household expenses.
He said, without a financial contingency in place, such as a savings fund or access to a low-cost credit line, some homeowners are turning to pricier ways to deal with unexpected costs, including high-interest credit cards or payday loans.
The survey showed 38 per cent of homeowners feel that their local housing market is unaffordable, while two of three homeowners expect housing prices to increase over the next year.
The perception of housing affordability varies greatly throughout Canada. In the Atlantic provinces, 83 per cent of homeowners feel housing is affordable, but in British Columbia, only 39 per cent of homeowners feel the same way.
Homeowners in Canada's more populated cities, including Toronto, Montreal, Edmonton and Calgary, are much less likely to describe their housing market as affordable (46 per cent) compared to those elsewhere in Canada (68 per cent).
Lack of affordability is most apparent in Vancouver, where just 33 per cent of homeowners said housing in the city was affordable.
The Manulife Bank of Canada poll surveyed 2,372 Canadian homeowners in all provinces between the ages 20 and 59 and with a household income of $50,000 or more. The survey was conducted online by Environics Research from July 22 to Aug. 15, 2015.
