Consumer Debt Index highlights impact of affordability crisis: More Manitoba and Saskatchewan residents say necessities such as food, transportation and clothing are less affordable

2022-10-03  4 minute read

Tanya Reynolds

MNP Consumer Debt Index

  • More than half say it’s becoming less affordable to feed themselves and their family (52%, +2pts).
  • Two in five say transportation has become less affordable (40%, +5pts).
  • Nearly half are finding it less affordable to put money aside for savings (47%, +8pts).
  • Two in five are finding clothing or household necessities less affordable (39%, +3pts).

Night view of Downtown Winnipeg

WINNIPEG, MB – October 3, 2022 – The impact of this year’s persistent inflation and consecutive interest rate hikes is becoming clear as Manitoba and Saskatchewan residents voice concerns about the effect on their wallets. According to the latest MNP Consumer Debt Index, which is conducted quarterly by Ipsos, significantly more Manitoba and Saskatchewan residents say they are more concerned about their ability to pay their debts as interest rates rise (56%), increasing seven points since last quarter.

“Households are having to put more money towards paying for basic living expenses as the cost of living rises, and that is leaving less of a financial buffer to managing the impacts of interest rate hikes,” says Tanya Reynolds, a Licensed Insolvency Trustee with MNP LTD in Winnipeg.

Yet while more Manitoba and Saskatchewan residents are finding life’s necessities less affordable, fewer find themselves closer to insolvency than last quarter (48%, -5pts), meaning they are $200 away or less from not being able to meet all of their financial obligations at the end of the month. The average resident also has more money to spend overall; the amount the average Manitoba and Saskatchewan resident has left over at month-end has grown by $127 from the previous quarter to $713, the largest increase amongst the provinces.

“There has been a slight improvement in the number of individuals who are at risk of insolvency since last quarter. However, nearly half of Manitoba and Saskatchewan residents are still just $200 away from not being able to cover their bills and debt obligations,” says Reynolds. “Any future increases to interest rates or the price of basic necessities could chip away at the amount they have left over at month-end and push some individuals closer to insolvency.”

Some optimism is surfacing along with the modest improvement to Manitoba and Saskatchewan residents’ budgets. Far more are now rating their personal debt situation as excellent (38%, +10pts) and fewer are rating it as terrible (16%, -6pts). When asked to forecast their expected debt situation a year from now, one in three expect their debt situation to improve (36%, +5pts), and fewer now believe it will worsen (11%, -6pts). Three in 10 (29%, +13pts) say they’re better equipped to absorb an interest rate increase of one percentage point than they used to be, increasing a significant 13 points since last quarter. They’re also less likely than any other province to say they’re concerned about the impact of rising interest rates on their financial situation (53%), dropping 10 points — although the proportion still represents more than half of residents.

“The economic situation here is still unfolding and it’s possible the optimism we’re seeing here could be only temporary. We tend to notice the effects of interest rate hikes over time, so we may currently be seeing a false sense of optimism,” Reynolds points out. “Only time will tell the full impact of our economic situation, so my advice would be to remain financially cautious.”

Reynolds advises households to take a closer look at their budget and test whether they would be able to cover all of their bills if the costs of their daily purchases and debts continue to rise. If more debt would be required to subsidize those bills, Reynolds recommends contacting a Licensed Insolvency Trustee for an unbiased assessment of their financial situation and the available debt-relief options. Licensed Insolvency Trustees are government-regulated and are the only professionals who can provide the full range of debt-relief options, including informal debt settlements, Consumer Proposals, and Bankruptcy.

“Often, individuals delay seeking professional debt help because they don’t realize how bad their situation really is — or they’re in denial about how bad it truly is. Waiting only draws out the stress and worry, and it can reduce the number of debt relief options they may have available to them,” says Reynolds. “Seeking the help of a Licensed Insolvency Trustee shouldn’t be seen as a last resort. They can provide advice even at the first signs of financial distress.”

About MNP LTD

MNP LTD, a division of the national accounting firm MNP LLP, is the largest insolvency practice in Canada. For more than 50 years, our experienced team of Licensed Insolvency Trustees and advisors have been working with individuals to help them recover from times of financial distress and regain control of their finances. With more than 240 offices from coast to coast, MNP helps thousands of Canadians each year who are struggling with an overwhelming amount of debt. Visit MNPdebt.ca to contact a Licensed Insolvency Trustee or use our free Do it Yourself (DIY) debt assessment tools. For regular, bite-sized insights about debt and personal finances, subscribe to the MNP 3-Minute Debt Break Podcast.

About the MNP Consumer Debt Index

The MNP Consumer Debt Index measures Canadians’ attitudes toward their consumer debt and gauges their ability to pay their bills, endure unexpected expenses, and absorb interest-rate fluctuations without approaching insolvency. Conducted by Ipsos and updated quarterly, the Index is an industry-leading barometer of financial pressure or relief among Canadians.

Now in its twenty-second wave, the Index has increased two points since last quarter to 92 points, although still remaining well below its benchmark score established five years ago. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between September 6 and September 13, 2022. For this survey, a sample of 2,000 Canadians aged 18 years and over was interviewed. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to, coverage error and measurement error.

National data is available upon request.