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."
The CICA Business Monitor is issued quarterly, based on a survey commissioned by the CICA. The report draws upon business insights of Canadian CAs (including Quebec CPA, CA and Ontario CPA, CA members) in leadership positions in privately and publicly held companies.
For the Q1 2013 study, emailed surveys were completed by 226 of 4,277 identified by the CICA as holding senior positions (CFOs, CEOs, COOs and other senior executive roles). The response rate was 5 per cent, with a margin of error associated with this type of study at ± 6.5 per cent, with a confidence level of 95 per cent. The survey was conducted by Harris/Decima Inc. from February 12 to 28, 2013. A background document is available online at www.cica.ca/businessmonitor.
* CICA and CMA Canada joined together January 1, 2013, to create CPA Canada as the national organization to support unification of the Canadian accounting profession under the CPA banner.
Chartered Accountants (CAs) are Canada's most valued, internationally recognized profession of leaders in senior management, advisory, financial, tax and assurance roles. Through their integrity, expertise, and internationally recognized qualification standards, Canada's 83,000 CAs sustain their influence and leadership position both in Canada and globally. As trusted business advisors to Canadian organizations of all sizes, Canada's CAs foster confidence in Canadian business and contribute to the health and sustainability of Canada's capital markets and economy. The Canadian Institute of Chartered Accountants (CICA) represents Canada's CA profession both nationally and internationally. The CICA is a founding member of the International Federation of Accountants (IFAC) and the Global Accounting Alliance (GAA).
About CPA Canada
CPA Canada is the national organization representing the Chartered Professional Accountant (CPA) profession in Canada. The Canadian Institute of Chartered Accountants (CICA) and The Society of Management Accountants of Canada (CMA Canada) created the organization on January 1, 2013, to support unification of the Canadian accounting profession under the CPA banner. CPAs will serve the public interest across all sectors of the economy with integrity, sound ethical practices, disciplined regulation and proven strategic management and financial expertise. Accounting bodies representing 85 per cent of Canada's professional accountants are committed to unification or have already merged under the CPA banner.
SOURCE: Canadian Institute of Chartered Accountants
For further information: