MNP Consumer Debt Index rebounds as Canadians take steps to safeguard their finances amid economic uncertainty

• Three-quarters of Canadians have cut spending (74%) or postponed major purchases (73%), signaling a broader shift toward financial caution.

CALGARY, AB – April 14, 2025 – The latest MNP Consumer Debt Index has rebounded to 88 points, a nine-point increase from the previous quarter, signaling a more optimistic outlook on Canadians’ personal finances. Canadians are taking steps to safeguard their finances amid ongoing economic uncertainty, with three-quarters (74%) saying they have cut back on spending. Women (77%) and those aged 35-54 (81%) are the most likely to have reduced their spending. Nearly the same proportion of Canadians (73%) say they are delaying major purchases or investments.

“Canadians’ feelings toward their personal finances have improved following two interest rate cuts by the Bank of Canada this year. While uncertainty remains around U.S. tariffs, their on-again, off-again nature may be providing Canadians with some optimism for the future — especially since these tariffs have yet to make a full impact on household budgets,” says Grant Bazian, president of MNP LTD, the country’s largest insolvency firm.

The proportion of Canadians concerned about the impact of rising interest rates remains close to the highest level on record (60%, +1 pt). However, overall concerns about the broader impact of interest rates have decreased due to the interest rate reductions this year. Fewer Canadians are worried about their ability to repay their debts, even if interest rates decline (43%, -7 pts). Nearly a quarter (24%, +4 pts) feel better equipped to absorb an interest rate increase of one percentage point, while the proportion (21%, -6 pts) who feel less prepared to absorb such an increase has declined. More than half (52%, -5 pts) continue to worry about being in financial trouble if interest rates rise, and nearly two in five (38%, -8 pts) fear that rising interest rates could move them towards Bankruptcy.

“Lower interest rates, along with the budget adjustments Canadians have already made, seem to be providing some financial breathing room,” says Bazian.

The majority of Canadians (81%) say economic uncertainty has made them more cautious about taking on new debt. This sentiment is consistent across genders, age groups, regions, and income levels. A higher proportion of Canadians this quarter believe they will be able to cover their living expenses in the next year without needing more credit (58%, +9 pts). Fewer Canadians this quarter regret the amount of debt they have taken on (43%, -6 pts).

“The results suggest that Canadians are taking proactive steps to reduce spending and lessen their reliance on credit as they brace for potential financial challenges on the horizon,” says Bazian.

Canadians' net personal debt rating has rebounded 14 points from last quarter's all-time low. Additionally, fewer Canadians (43%, -7 pts) report being $200 or less away from financial insolvency each month. This is due to significantly fewer Canadians saying they are already insolvent (26%, -9 pts).

“Four in 10 Canadians still report being on the brink of insolvency, and more than a quarter have no financial cushion, flexibility, or room in their budgets. Individuals without a safety net will likely experience economic hardship when faced with rising costs and housing expenses, or a potential loss of income," says Bazian.

More than half (58%) of Canadians express heightened concern about their ability to pay off debt due to ongoing economic uncertainty. This concern extends to broader financial stability, with about two in five Canadians worried about the possibility of someone in their household losing their job (38%, -3 pts). Half (50%) of Canadians say they are relying more on financial advice and planning due to the uncertain economic environment.

Two in five (44%) Canadians say they are bracing for an increase in housing costs within the next year. Renters have a higher expectation of rising costs than homeowners, with two in three (65%) expecting their housing costs to increase within the next year, compared to nearly a third of homeowners (30%). Half (52%) of those earning under $40,000 expect housing costs to increase, compared to a third (34%) of those earning $100,000 or more. Canadians under the age of 55 are more likely to expect an increase compared to those 55 and older.

"More than four million mortgages — roughly 60 percent of all outstanding mortgages in Canada — are set to renew by the end of 2026 at potentially higher rates. This is just one example of the rising expenses, compounded by ongoing economic uncertainty, that those teetering on the edge of financial insolvency can’t afford," says Bazian.

Bazian says there is help for those struggling to manage their debt repayments, missing monthly payments, or simply unable to make ends meet.

“Licensed Insolvency Trustees provide unbiased advice to help Canadians make informed decisions to address both short-term financial pressures and long-term debt management — especially during times of economic instability,” says Bazian.

Licensed Insolvency Trustees play a vital role in helping Canadians navigate financial challenges and make informed decisions about managing their debt. Seeking guidance from a Licensed Insolvency Trustee can provide individuals with a clear understanding of their debt relief options in an unpredictable financial landscape. Licensed Insolvency Trustees provide free consultations to help individuals assess their financial situation, understand their options, and create customized plans to regain control of their finances.

MNP’s national team of Licensed Insolvency Trustees offers free consultations across the country to help severely indebted Canadians 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 thirty-second wave, the Index has rebounded to 88 points, up nine points since last quarter. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between March 11 and March 14, 2025. 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.