81% of Canadians in debt

CANADA - 81% of Canadians say if they won the lottery the first thing they would do is pay off their debts.

59% of Canadians admit they live "paycheque to paycheque" and are one pay slip away from financial instability.

The statistics are part of a study released today by the Canadian Payroll Association which reports that many Canadians would be in severe financial difficulty if their pay was cut or delayed by one week. That figure is unchanged from a similar report from 2009.

Debt is #1 on the list of worries for Canadians in 2010.

In 2009 the majority of Canadians the #1 worry was about putting money away from retirement.

16% of Canadians say they're not saving anything.
34% of Canadians report they are saving between 1 and 5% of their paycheques.

In Ontario 3 out of 4 workers say they don't think they could find a similar paying job if they lost their current job. Ontario has the worst optimism rate out of all of Canada.

In 2010 about 6 out of 10 Canadians think the economy will improve. In 2009 it was 7 out of 10, which suggests the economy is actually getting worse and Canadians are losing their optimism.

Household debt in Canada has skyrocketed to $1.41 trillion in December 2009 according to a report by the Certified General Accountants Association of Canada in May.

Household debt in Canada has grown 250% since 1989. The average Canadian (including children) currently has approx. $42,000 in debt, up from approx. $16,800 in 1989.

The news is even worse for home owners with mortgages. If interest rates go up by 2% then the average Canadian household would lose 11% of their extra spending budget. Many of them would be stretched to the breaking point and would have to renege on their mortgage.

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