Canadians across the country are waiting for their financial aid to arrive, as the COVID-19 pandemic brings the economy to a crawl. More and more people are applying to Employment Insurance, while others are waiting for the Canadian Emergency Relief Benefit application portal to open up, promising a quicker payout.
Many Canadians are finding themselves dealing without emergency savings to dip into; having to make difficult decisions around food, rent and other bills.
On Thursday, Doug Hoyes, Co-founder, Hoyes Michalos Insolvency Trustees appeared on the Mike Farwell Show on 570 NEWS to discuss the financial realities many of their clients are experiencing.
His advice comes down to priorities. People who have still retained their jobs or some kind of stable incomes during this time, he advises them to continue to pay down debts. For others not fortunate enough, he said to focus the essentials. Rent is considered last on that list. Courts are closed during this time, so people should not worried about getting sued for now. He did recommend talking with your landlord to find some common ground, but rent was not a priority compared to food or medicine.
“I do believe this will impact us just as 9-11 impacted any who whose had to travel since then; just as the Great Depression impacted our grandparents and great grandparents. If you lived through the Great Depression, you were frugal for the rest of your life,” he said.
The pandemic is expected to last a few months, which has Hoyes worried for the businesses and jobs, that may not be able to return after that period of time.
“How could you go with zero income; zero revenue for an extended period of time when the bills are still mounting. If this on for any length of time, it will be a very serious situation for employees, for workers, but also for the small businesses who employ them.”
He said he believes that “we’re probably in for a fundamental reset of the economy,” which will be the start of our problems, but also brings some relief with it. He said real estate prices could be going down in the aftermath of COVID-19, and will likely bring rent down too, making it more affordable for people to live.
On the otherhand, he said lenders may have given deferrals, but likely did not freeze the interest charges.
“The interest is still clocking in, and because you’re not paying down the debt, the principle is certainly not going down either, so you’re actually incurring more interest as a result of this.”
He said, he expects his office to get very busy around that time.
