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article imageSurvey finds half of Canadians to pay off debt with holiday bonus

By Andrew Moran     Dec 21, 2011 in Business
Toronto - A new study released this week suggests that Canadians who are expected to receive a holiday bonus this year will actually put that money towards their credit card, line of credit and other forms of debt.
Digital Journal reported last week of a new Statistics Canada report that highlighted an increase in household debt amid stagnant income and those piling onto their debt. Mark Carney, head of the Bank of Canada, has iterated his concerns on the climbing household debt issue.
A new survey shows that a large number of Canadians will use any extra money they get their hands on to pay down their debt loads.
According to a Bank of Montreal study, 29 percent of working Canadians expect to receive a year-end bonus and 79 percent of those individuals believe the bonus will be about the same amount or more than last year.
Unfortunately, that money won’t be theirs. More than half (53 percent) of the respondents – 57 percent in Ontario – will use the money to pay down their household debt, such as credit cards, auto loans, lines of credit and mortgage.
“There is little doubt that global economic uncertainty has proved to be challenging for many Canadian businesses this year,” said BMO Commercial Banking Vice-President, Cathy Pin, in a press release.
“In this environment, business owners have had to achieve a balance between recognizing the achievements of their employees and rewarding their contributions, with the need to maintain efficient business operations. One thing we know, from talking with entrepreneurs, is the importance they place on their employees and the role they play in their companies' success.”
Others, though, will be using the extra cash to reward themselves. Nearly a quarter of respondents will use the money for holiday spending, 17 percent will buy themselves consumer products and 15 percent will take a vacation.
The online survey was conducted by Leger Marketing’s online panel, LegerWeb, with 1,542 Canadians between Dec. 5 and Dec. 8. The survey contains a margin of error of +/- 2.5 percentage points.
More about Holiday bonus, Debt, Canadians, bank of montreal survey, legerweb
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