Canadians are as likely to spend their savings from the recently introduced federal tax cuts on paying down debt (38%) as on miscellaneous spending (37%), according to a new poll sponsored by Edward Jones.
“What we are seeing is two critical elements of financial planning competing for priority amongst Canadians,” says Mary Chan, a partner at Edward Jones. “We face unavoidable expenses every day and debt is an unfortunate reality for many, so it’s not a huge surprise that these two factors struck home with Canadians.”
Canadians were asked to choose two options on which to spend their tax cuts. Other options selected included retirement savings (13%), saving for a vacation/travel (13%) and investing (11%). Only 5% of Canadians plan to save for a home and only 3% for their children’s education.
“While paying off debt is an important first step, it’s disheartening to see that many Canadians do not plan to use their tax savings for retirement or to invest,” says Chan.
The survey was conducted by Leger Marketing.
Other key findings:
- Atlantic Canadians are most likely to take advantage of these new tax breaks to lower their personal debts (49%) while Quebeckers are least likely (32%);
- Quebeckers are most likely to utilize these tax saving options on miscellaneous spending (46%);
- Ontarians are the group most likely to use the additional income for vacation (17% vs. 13% nationally), while more Albertans plan to utilize their tax savings to save for retirement (23% vs. 13% nationally);
- Albertans are the group most likely to invest the savings (22% vs. 12% nationally) while Atlantic Canadians are the group least likely to invest (6%).
The survey results are based on an online survey of 1,513 nationally representative adults between October 30 and November 4 2007 by Leger Marketing.