Albertans’ confidence in personal finances, debt repayment abilities plummets amid pandemic fatigue and uncertainty

• Half say they’re concerned about their current level of debt (50%, +9pts).
• Fewer than three in 10 are confident in their ability to cope with unexpected events without increasing their debt burden (27%, -5pts).
• Four in 10 have concerns about coping with a loss of employment or change in wage or seasonal work (40%, +14pts).
• Three in 10 say it’s become much less affordable to set aside money for savings (28%, +6).

CALGARY, AB –January 17, 2022 – Albertans’ confidence in their personal finances has plummeted as uncertainty and pandemic fatigue continue to build amid the spread of the COVID-19 Omicron variant, according to the latest MNP Consumer Debt Index conducted quarterly by Ipsos. Compared to last quarter, the number of Albertans who are concerned about their current level of debt has jumped nine points to 50 percent, the highest level amongst the other provinces. Slightly fewer are confident they can comfortably cover their living expenses in the next year (57%, -1pt) without going into debt. Making matters worse, four in 10 (38%, -2pts) say they’re finding it even harder to pay down debt. Compared to the other regions, Albertans are the most likely (28%) to say it’s become much less affordable to set aside money for savings — up a significant six points since last quarter.

The MNP Consumer Debt Index, which measures Canadians’ attitudes toward their consumer debt and gauges their ability to pay their bills and endure unexpected expenses, has fallen seven points since last quarter to 88 points — the lowest reading since its inception in June 2017.

“It’s clear households in Alberta are becoming increasingly worried about the debt they are carrying as we near two years into the pandemic and the province enters another wave,” says Donna Carson, a Licensed Insolvency Trustee with Alberta-based MNP LTD. “We often see financial optimism wane as holiday bills become due. But additional factors such as the Omicron variant and resulting pandemic fatigue, as well as rising inflation and the potential for interest rate increases are making Albertans feel more financially insecure this year.”

As coronavirus uncertainty continues, and with so many Albertans feeling financial anxiety, far more are uneasy when it comes to being prepared financially for unexpected expenses. Fewer than three in 10 (27%, -5pts) are confident in their ability to cope with life-changing events without increasing their debt burden. In comparison to the other provinces, Albertans are the most likely (35%) to say they are not confident in their ability to cover an unexpected car repair, jumping a significant 10 points since September. They are also the most likely (41%, +10pts) to say they are not confident they can cope financially with an illness that renders them unable to work for three months. Four in 10 (40%) have concerns about coping with a loss of employment or change in wage or seasonal work, a jump of 14 points since September — by far the largest increase compared to the other provinces. Albertans are also less confident in their ability to handle a change in their relationship status (27%, -5pts) or cope with the death of an immediate family member (13%, -9pts).

“Many Albertans are starting the new year with uncertainty about another round of job losses or reduced working hours, unexpected business closures, and COVID-related health concerns. It can be hard to see the light at the end of the tunnel when budgets are stretched thin and even just one unexpected expense can thrust a household into financial turmoil,” says Carson.

Four in 10 (44%) Albertans report they’re $200 away or less from not being able to meet all of their financial obligations at month-end. Despite dropping six points from last quarter, this sits just below the national average. This proportion also includes nearly three in 10 (28%, -3pts) who say they already don’t make enough to cover their bills and debt payments, remaining above the national average.

“The cost of living is on the rise, and we expect those households who were already overextended throughout the pandemic may feel they have to resort to credit just to afford basic necessities and make ends meet,” says Carson.

Compared to the same time last year, more Albertans are engaging in what many debt professionals consider bad financial habits. In fact, Albertans are the most likely to admit to paying only the minimum balance on their credit card (27%, +5pts) compared to the other provinces — and more Albertans say they have borrowed money they can’t afford to pay back quickly (16%, +4pts). More also say they were lured in by deals or special offers on days such as Black Friday this year (10%, +4pts). Additionally, six in 10 (59%) Albertans point to low interest rates as the catalyst for buying things that they otherwise might not be able to afford, a staggering seven-point increase since last quarter.

With concerns over inflation and cost of living at the forefront of many Albertans’ minds, two in 10 (20%, +1pt) believe their debt situation is worse than a year ago. Half (50%, unchanged) of Albertans say they regret the amount of debt they’ve taken on. When looking five years into the future, more Albertans appear to be apprehensive about the road ahead, with one in 10 (13%) believing their debt situation will worsen, an increase of six points.

“Albertans have eagerly taken advantage of low interest rates to make purchases that might not normally be within their budget. With potential interest rate increases around the corner and the pressure of hefty holiday bills coming due, it isn’t hard to see why many are dangerously close to the tipping point,” explains Carson. “Recognizing the early warning signs of financial trouble and acting swiftly can make all the difference. Instead of piling on more debt to try to make ends meet, seek advice from a debt professional who can help stop the cycle of debt and bring you peace of mind.”

Licensed Insolvency Trustees are the only federally regulated debt professionals who can offer guidance regarding all the debt-relief options available to Albertans. They provide customized, unbiased advice to help individuals make informed choices to deal with debt responsibly.

“People who are trapped in debt often feel alone in their struggle, but this isn’t something you have to go through by yourself. Speaking with a professional can help Albertans can avoid the stress and anxiety caused by spiralling debt, creditor or collection calls, wage garnishments, and tax issues. Reach out for help when you first begin to see red flags, even an anticipated missed payment. Don’t wait until you’re overwhelmed to regain your financial footing,” says Carson.

Albertans can obtain a free and confidential assessment of their financial situation with a Licensed Insolvency Trustee at MNP LTD. As the only government-regulated debt professionals, they provide a full range of debt-relief options, including Consumer Proposals, informal debt settlements and Bankruptcy.

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 nineteenth wave, the Index has plummeted seven points since last quarter to 88 points, the lowest reading since its inception in June 2017. Visit MNPdebt.ca/CDI to learn more.

The latest data, representing the nineteenth wave of the MNP Consumer Debt Index, was compiled by Ipsos on behalf of MNP LTD between December 1-7, 2021. 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.

A summary of some of the national data is available by request.