Atlantic Canadians’ Fears About Debt, Interest Rates And Personal Finances On The Decline, Yet More Are Close To Insolvency

According to a recent Ipsos poll conducted by MNP LTD., Atlantic Canadians are the sole exception to a Canada-wide trend of increased anxiety around debt, interest rates and personal finances. While a significant number still worry about their ability to repay debts (57%) and that they’ll be in financial trouble if interest rates continue to rise (48%), both figures have declined by 8 points since September.

One third (33%) continue to fear rate hikes could push them toward bankruptcy, but that too is down six points over the previous quarter. Also noteworthy is that fewer Atlantic Canadians are within $200 from financial insolvency at month end (45%, -4%) – and fewer say they don’t earn enough to cover bills and debt payments (31%, -5%).

Taken together this may all seem like a cause for optimism, but a deeper look at the numbers cautions otherwise. While the fears may be easing off, the number of people experiencing financial difficulty is still quite high – with many people technically insolvent and a large number of bankruptcy and consumer proposal filings in the last several months.

Higher interest rates continue to be a major contributor to financial stress in the Atlantic provinces. As living expenses remain steady and the cost to service debt gets ever higher, opportunities to reduce the principal value of those debts will become scarcer.

Growing debt is also a concern, wore than two in five (44%, -3%) believe they’ll require credit cards and lines of credit in the next 12 months just to cover basic living and family expenses. And less than one in three are confident they could cope financially with an unexpected expense such as a major car or home repair without relying on lenders.

Half (50%) of Atlantic Canadians say they’re feeling the impacts of previous interest rate increases. And, even with a four percent reduction, more than half (52%) remain worried about how future increases will impact their financial situation. More than two in five (44%) are both concerned about their current level of debt and regretful about how much debt they’ve taken on (46%). 

As the edge remains in view for many people, it’s important to be aware there are systems in place to help provide stability and peace of mind to severely indebted Canadians. Seeking help from a Licensed Insolvency Trustee is, in many cases, the best route to get the relief and financial fresh start they deserve.

Click here to view our digital infographic and learn more insights from this quarter’s MNP Consumer Debt Index.

Other MNP Consumer Index highlights include:

• Regionally, more Canadians across the country, with the exception of Atlantic Canadians, have seen an increase in the proportion of residents that are within $200 or less of financial insolvency. In particular, residents of Saskatchewan and Manitoba (56%; +8pts) are the most likely to be financially insolvent, followed by Alberta (48%; +8pts), British Columbia (41%; +6pts), Ontario (46%; +5pts), Quebec (46%; +5pts) and Atlantic Canada (45%; -4pts).
• Less than four in ten Canadians say they are confident in their ability to cope financially if an unexpected life-changing event were to occur, including: a change in relationship status (36%), having an illness and being unable to work for three months (33%), an unexpected auto repair (31%), loss of employment (30%), a death of an immediate family member (30%) or paying for own or someone else’s education (29%).
• A year from now, nearly four in ten (36%) Canadians expect their debt situation to improve, whereas nearly half (47%) are counting on the future for improvement, indicating they expect their debt situation to get better five years from now. Though, regardless of the amount of time allotted, net positivity has significantly decreased since September, indicating Canadians are becoming less optimistic about their future debt situation.
• Fewer Canadians believe in their ability to absorb an interest rate increase of one percentage point or an additional $100 in interest payments, as the gap between those who say it is getting better than worse is tapering.One third (34%) of Canadians say they are worried that someone in their household or themselves will become unemployed.

About MNP Debt

MNP LTD, a division of 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 230 Canadian offices from coast-to-coast, MNP helps thousands of Canadians each year who are struggling with an overwhelming amount of debt. Visit www.MNPdebt.ca to contact a Licensed Insolvency Trustee or get a free checkup for your debt health using the MNP Debt Scale.

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, follow a budget 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. Visit www.MNPdebt.ca/CDI to learn more.

The latest Index data was compiled by Ipsos on behalf of MNP LTD between December 7 and December 12. For this survey, a sample of 2,154 was interviewed online. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.4 percentage points, 19 times out of 20, had all Canadian 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.