A sizable majority of executive chartered accountants (CA) surveyed (75 per cent) believe the high level of personal debt among Canadians is hurting the economy, according to the latest Canadian Institute of Chartered Accountants (CICA) Business Monitor.

Fifty-five per cent of respondents also view high debt levels as a threat to future demand for products or services at their companies.

“Clearly, business leaders are uncomfortable with the high level of personal debt in the country,” says Nicholas Cheung, a director with 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 the Bank of Canada’s Mark Carney and the federal government to reduce personal debt levels. Approximately 38 per cent of respondents agree it is happening, 31 per cent disagree, 25 per cent are neutral and five per cent do not know.

Earlier research conducted for CICA, focusing on personal finances, reveals 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.

“While stating intentions to reduce debt is important, it is critical 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 CICA.

On Jan. 1, CICA and the Certified Management Accountants (CMA) Canada joined together to create the Chartered Professional Accountants (CPA) Canada as the national organization to support unification of the Canadian accounting profession under the CPA banner.