Bleak debt outlook: British Columbians concerned about further interest rate hikes

2023-10-18  3 minute read

Linda Paul

MNP Consumer Debt Index

  • Six in 10 are concerned about being in financial trouble if rates rise (60%, +2 pts).
  • Nearly half are concerned about being driven towards Bankruptcy if rates
    rise (49%, +4 pts).
  • A quarter report a decline in their capacity to handle an interest rate
    increase (24%, +1 pt).
  • A third say their ability to absorb an additional $130 in interest payments
    is worse (34%, -1 pt).

totem poles with fall trees in the background

VANCOUVER, BC – October 18, 2023 – From near zero to the highest interest rates in more than two decades, the latest MNP Consumer Debt Index finds British Columbians are concerned about what further rate hikes could mean for their finances. Three in five (60%, +2pts) are concerned further rate increases could put them in financial trouble. Nearly half worry it could drive them toward Bankruptcy (49%), up four points since last quarter.

“There’s no mystery what is causing financial stress among British Columbians. It’s getting increasingly difficult to make ends meet,” says Linda Paul, a Licensed Insolvency Trustee with MNP LTD in the Lower Mainland. “We’re seeing increased concern over the potential for continued interest rate hikes. That’s on top of the already elevated debt-carrying costs and living expenses. Many household budgets are already stretched thin.”

The average British Columbian has $681 remaining at the end of the month after covering all essential bills and debt payments — down $166 from the previous quarter, as the surging cost of living has chipped away at household budgets. A third of households (34%, -1 pt) say their ability to absorb an additional $130 in interest payments is much worse this quarter. A quarter (24%, +1 pt) similarly say their ability to deal with an interest rate increase of one percentage point has weakened.

Despite the shrinking household budgets, the data did highlight a few notable improvements. British Columbians feel marginally better about their ability to pay their debts (57%, -3 pts). Nearly half say they regret or are concerned about their debt, but debt regret (45%, -4pts) declined this quarter — perhaps signalling households are adjusting to the higher interest rate environment. Moreover, fewer (46%, -6 pts) are $200 away or less from being unable to meet all their financial obligations, and fewer (31%, -1 pt) say they don’t make enough to cover their bills and debt payments.

“The number who report debt concern has declined for now. The strong job market could be helping many households adjust to their new financial reality. Still, as higher interest rates slow the economy, the uncomfortable truth is we will inevitably see consequences like increased unemployment,” says Paul. 

A third of British Columbians are concerned about unemployment in the province and say they are worried about someone in their household potentially losing their job (34%, -1 pt).

Paul says that higher unemployment and underemployment — where individuals either don’t earn enough or receive enough employment hours to meet their household expenses — is one of the leading causes of insolvency.

“The ever-increasing cost of living may be somewhat manageable when income remains consistent. That can quickly change when there’s an unexpected loss of income. No amount of cutting back on non-essential spending can replace that cash flow,” she says.

“That’s where relying on credit to meet basic household needs becomes a real risk. Some may use credit to make ends meet, reasoning they can pay it off as soon as their circumstances improve. One payment becomes two. Then, they may start to carry a balance. Then, they start making minimum payments. Then, they start to miss payments. That’s how people end up on a high-interest debt treadmill.”

The consequences of missed payments, compounding interest, repossessions, or foreclosures can be swift and have long-lasting effects. Paul recommends anyone who anticipates missing payments first contact their lender to see if they can set up a payment plan, then seek advice from a Licensed Insolvency Trustee.

“Individuals facing the prospect of spiralling debt or missed payments should seek professional debt advice. Licensed Insolvency Trustees offer impartial advice on various debt relief solutions, including budgeting, debt consolidation, Consumer Proposals, and Bankruptcy," she says.

Licensed Insolvency Trustees are the only federally regulated debt professionals who can assist with all the debt relief options — including Consumer Proposals and Bankruptcies, which can immediately stop harassment from debt collectors — and discharge people from debt. To support those in need of financial assistance, MNP provides free consultations across the country.


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 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-sixth wave, the Index increased to 86 points, up three points since last quarter, but remains below the five-year average. Visit to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between September 5 and September 8, 2023. 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.

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