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Debt still a problem for many Albertans

Debt still a problem for many Albertans

Posted on: 9/6/2018 | Author: ATB Financial's Economics + Research Team

​​Although a large share of Albertans believes the provincial economy is improving, a new survey shows many are still burdened by debt.

According to the annual survey from the Canadian Payroll Association, 44 per cent of respondents live pay cheque to pay cheque and 38 per cent of respondents spend all of, or more than, their net pay. About 40 per cent of survey respondents said they feel overwhelmed by debt and, for 37 per cent of respondents in Alberta, debt has increased (versus 34 per cent nationally).

Despite these debt levels, future views about economic conditions remain positive. In fact, Albertans held the strongest views about future economic performance. Three out of five respondents (60 per cent) believe their local economy will improve in the next year.

The Canadian Payroll Survey is consistent with the latest bankruptcy statistics. The number of personal bankruptcies grew 2.3 per cent in June as compared to the same month a year earlier, while the number of people in consumer proposals—a legally binding agreement that is put in place to provide immediate protection from debt collectors and arrange a repayment of debt owing—grew 25 per cent over the same time period.

The Bank of Canada announced yesterday that it would keep its key interest rate steady. However, many market watchers believe interest rates will increase one more time by the end of the year. A move to more costly lending could cause more Albertans to feel burdened by debt over the next year.

Personal bankruptcies, graph

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