Over half of Canada’s self-employed workers face income shortfalls—here’s what that means

There are over 2.7 million self-employed workers in the country, according to Statistics Canada. Although that number has grown over the last year, higher numbers haven’t meant an improvement in self-employment finances.

Alberta-based non-profit credit counselling agency Money Mentors partnered with Angus Reid to survey self-employed Canadians. What they found was alarming: over half of self-employed workers had an income shortfall at least once over the past year, and 53% used a credit card or line of credit to pay for groceries, bills, or everyday expenses because of income shortfalls.

We’ll dig into the survey results to see how unpredictable earnings affect everyday decisions around spending and saving. And, if you’re self-employed and struggling, we have some valuable resources that can help you get your finances back on track.

Survey says: self-employed people aren’t as financially secure as they’d like

Financial fitness can seem like an abstract concept, but as most people know, financial freedom gives you opportunities. Whether that means being able to invest and save for retirement, build an emergency fund, or simply pay for groceries, financial security looks like options.

When you’re dealing with money problems, it might feel like you can’t afford to make smart money moves. As the Money Mentors survey found, self-employed people facing financial insecurity made these tough decisions:

• Almost half (47%) cut back on their grocery or household essentials spending, and 45% pulled money out of savings or an emergency fund to make ends meet
• Over half (54%) cut back or stopped contributing to savings
• 18% didn’t put aside enough money to cover the income tax or GST/HST they owed
• 23% delayed or missed a bill payment
• 22% borrowed money from friends or family

When asked if they could get by on their savings if all their income stopped, 46% of self-employed respondents said they couldn’t cover more than two months of expenses. 

Even more alarmingly, 13% said they had no savings at all. Remember, if you’re self-employed, living paycheck to paycheck looks very different from what it does for someone working a steady job that reliably issues payroll. Self-employed workers are often paid on their clients’ timelines and are responsible for issuing invoices and following up on payments.

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The survey also found gender-based differences in self-employed financial resilience. 60% of the women surveyed had income shortfalls compared with 43% of men. Not surprisingly, 58% of women felt anxious or overwhelmed about their finances, but just 39% of the men did.

The toll financial insecurity takes on mental health

It’s challenging to prepare for the future when you’re struggling with the day-to-day. Around 37% of self-employed Canadians have delayed, reduced, or stopped contributions to their retirement savings, and 36% have done the same for their emergency funds.

These limitations haven’t done great things for mental health. Almost half (48%) of self-employed workers said they felt anxious or overwhelmed about their financial situation and nearly one in three (28%) said they had lost sleep over it.

Worryingly, 20% of self-employed Canadians said they avoided taking time off, even when they were sick or needed a break, because they couldn’t afford the loss of income. 

How self-employed people can build financial resilience 

In many cases, self-employed workers know what moves they need to make: making on-time payments, saving for retirement or taxes, building an emergency savings fund, etc. But as Stacy Yanchuk, CEO of Money Mentors, says, “Financial literacy is important, but it can only go so far when income is unpredictable and bills keep coming.”

That’s why assistance from non-profit credit-counseling agencies is so helpful. Sometimes, you just need help creating an effective strategy for your self-employment income and expenses. For instance, Money Mentors offers F.R.E.S.H. (Financial Reset Program for Entrepreneurs & Small Business Owners) to Alberta entrepreneurs and small business owners. 

“People need support before cash flow challenges turn into bigger financial problems,” said Yanchuk, which is why a program that gives one-on-one financial check-ins, guidance, and referrals can be a game-changer. 

Note about Budget 2026 goals

Some of that support could come from new government programs or opportunities. Ottawa just released Budget 2026 with the goal of improving affordability for Canadians. Although details are still emerging, we can expect policies like those released over the past year, from grocery assistance and affordable childcare to lower heating costs and expanded benefits for low-income workers.

Read more about debt:

• What is the best way to pay down debt?
• The MoneySense guide to debt management
• How to consolidate debt in Canada