Significantly more British Columbians report being $200 from insolvency, three in 10 say they can’t cover their bills and debt payments each month

• Nearly half of British Columbians are feeling a social squeeze as the financial pressure of social obligations means many simply can’t afford to participate.
• A third of British Columbians say they still haven’t recovered financially from the pandemic four years later

VANCOUVER, BC – April 8, 2024 – The latest MNP Consumer Debt Index finds that British Columbians continue to grapple with debt anxieties, especially when compared with the rest of the country. Significantly more British Columbians (45%, +7 pts) report being $200 or less away from failing to meet all their financial obligations this quarter. This includes three in 10 (29%, +12 pts) who say they already can't cover their bills and debt payments, marking a significant 12-point increase since last quarter. About three in five express concerns about their ability to repay their debts (60%, +4 pts) and indicate that they will be in financial trouble if interest rates go up much more (58%, +9 pts) — significantly more than last quarter.

“Despite improved financial sentiment across most provinces, British Columbians continue to face significant debt anxieties,” says Linda Paul, a Licensed Insolvency Trustee with MNP LTD in the Lower Mainland. “Notably, B.C. was the only province this quarter to see an increase in households on the brink of insolvency, alongside a rise in concerns about debt repayment and running into financial trouble.”

With the prospect of interest rate cuts on the horizon, a quarter of British Columbians perceive their current debt situation to be better (26%, unchanged) and slightly fewer rated it as much worse compared to a year ago (16%, -2 pts). However, fewer this quarter say they are much better equipped to absorb an interest rate increase of one percentage point (26%, -2 pts) or an extra $130 in interest payments (21%, -3 pts). Half regret the amount of debt they’ve taken on in life (51%, +6 pts), significantly more than last quarter, and two in five are concerned about their level of debt (41%, -1 pt).

“The looming prospect of mortgage renewals puts an additional strain on many households — particularly in B.C., where post-renewal mortgage payments have surged more significantly than other parts of the country. This could exacerbate the financial challenges already faced by many British Columbians,” says Paul. “People dealing with these kinds of financial struggles often feel they are alone, not realizing that help is available. Seeking professional assistance sooner rather than later can stop debt problems from escalating. Individuals often tell us that they wish they had reached out for help sooner.”

Paul says that the shame and guilt associated with unmanageable debt often cause people to delay getting professional assistance. However, this puts them at risk of aggressive collections activity and debt relief scams — resulting in further stress and isolation.

“Debt is a burdensome and isolating experience. Adding to the strain of debt is the persistent cost-of-living crisis, marked by significant rises in food prices and monthly expenses, alongside the COVID-19 pandemic’s enduring financial impacts,” explains Paul.

Nearly half of British Columbians (48%) indicate they are feeling a social squeeze on their personal finances and are worried about the amount of money they’ll have to spend on lifestyle and social obligations.

“Participating in social events or celebrations such as birthdays, weddings, or graduations can be exceedingly expensive. For those who can’t afford to participate, it can be overwhelming and discouraging,” explains Paul. “People often feel compelled to maintain appearances and participate in social activities — despite financial constraints. This pressure to keep up with social expectations may lead some to sink further into hardship.”

While about a third of British Columbians say they have recovered financially since the start of the pandemic in 2020 (35%), a similar proportion say they are in a worse financial state than they were pre-pandemic (32%).

“Some British Columbians are still in a holding pattern when it comes to their unmanageable debt. However, things won’t improve if you don't take action. Seeking professional guidance from a Licensed Insolvency Trustee is a crucial step towards creating a plan to deal with debt. Everyone’s situation is unique — which is why receiving personalized, unbiased advice is especially important.”

MNP’s national team of Licensed Insolvency Trustees offers free consultations to help severely indebted British Columbians get unbiased debt advice, understand their rights, and determine the best path forward. Licensed Insolvency Trustees are the only federally regulated debt professionals who can assist with all the debt relief options, including Consumer Proposals and Bankruptcy, stop harassment from debt collectors, and discharge people from debt.

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-eighth wave, the Index increased to 91 points, up eight points since last quarter. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between March 8 and March 15, 2024. 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.