Canada's middle class is increasingly burdened by rising living costs and taking on more debt as the 'K-shape' economy widens the wealth gap between income groups.
In Canada, the middle class is facing significant financial pressures as the higher cost of living forces more individuals to incur debt. New data indicates that as the economy continues to exhibit a 'K-shape' trajectory, where wealth is consolidating among the highest earners while the lower-income groups struggle, the implications are dire for broader segments of society. Financial reports show that even individuals with higher credit scores are taking on more debt, suggesting that even those who are typically financially secure are feeling the pinch.
Rebecca Oakes, vice-president of analytics at Equifax Canada, identifies this trend as part of a growing divergence between different income groups. According to her, higher-income households—typically considered lower-risk—are beginning to experience financial strain, indicating that the issues affecting the economy are not isolated to lower-income brackets. The overall consumer debt in Canada has surged, with observations noting a 3.13 percent increase year-on-year in consumer debt and a particularly alarming 4.5 percent rise in non-mortgage debt, reaching a staggering total of $2.65 trillion.
