TORONTO, March 26, 2013 /CNW/ - A sizable majority of executive chartered accountants surveyed (75 per cent) believe the high level of personal debt among Canadians is hurting the economy, according to the latest CICA Business Monitor (Q1 2013).
Fifty-five per cent of the respondents also view high debt levels as a threat to future demand for products or services at their company.
"Clearly, business leaders are uncomfortable with the high level of personal debt in the country," says Nicholas Cheung, a director with the Canadian Institute of Chartered Accountants (CICA)*. "The executive CAs understand that at some point interest rates will rise. When that happens, many Canadians could be challenged to keep up with mortgage or debt payments and this would greatly impact their ability to purchase goods or services."
No consensus is emerging among the executive CAs as to whether Canadians are following the advice of Bank of Canada Governor Mark Carney and the federal government to reduce personal debt levels. Thirty-eight per cent of respondents agree it is happening, 31 per cent disagree, 25 per cent are neutral and five per cent do not know. (Totals do not add to 100 per cent due to rounding.)Earlier research conducted for the CICA, focusing on personal finances, reveals that debt reduction is an area where Canadians want to take action in 2013. Half of those surveyed call reducing personal debt a high priority while another 15 per cent view it as a moderate priority. More details are available online at www.cica.ca/2013financialpriorities. "While stating intentions to reduce debt is important, it is critical that Canadians follow through and take action," explains Cheung. "Only time will tell if personal debt levels drop in the months ahead."