While we may all like to point the finger at those Vancouver and Toronto mortgages when it comes to the debt in our country, it turns out that the most debt in Canada lies in the Atlantic provinces. This comes from a poll done by CIBC. While that poll showed that many Canadians are starting to make extra payments to pay down their debt (you can find our post about that here,) it also showed that there’s one particular area of the country that would have the most trouble paying it down when interest rates rise – out East.
Currently, about 72 per cent of Canadians are carrying some form of debt – and the survey showed that about 50 per cent of that is currently tied up in home equity lines of credit in Canada. Out in Atlantic Canada though, that number climbs to 78 per cent of people that currently carry some form of debt. But, not everyone’s worried.
Geoff Dillon, senior director of retail and business banking at CIBC said that Canadians, and those out East particularly, shouldn’t worry about what the survey says because all Canadians are carrying debt in some form or another. He goes on to say that when residents of Atlantic Canada make extra payments to pay down their debt, this number will be reduced and will fall somewhere around the same number as is currently showing in the rest of the country. Furthermore, Dilon says, the results derived from the same poll last year showed much of the same results, which just goes to show that most Canadians are carrying debt of some kind.
So is the situation out East really that dire? Well, dire is a strong word; and they are only a few percentage points ahead of the rest of the country when it comes to how much debt there is in the region. But to say that the numbers simply don’t matter because everyone has debt, as Dillon says? Or to say that similar results from year to year mean that we should disregard what the poll is showing? Absolutely not.
It doesn’t take an expert to tell you that when people pay off their debt, their situation becomes better, and while it’s advantageous for Atlantic Canada to be making extra payments, there should still be some concern that they carry the most amount of debt in the country. Also, we’d just like to point out to Mr. Dillon – if the poll numbers really don’t matter that much, why does his bank continue to conduct the survey year after year?