Fear Of Rate Hikes Continues To Intensify Among Albertans

2018-10-22   minute read

Zaki Alam

MNP Consumer Debt Index

A recent Ipsos poll conducted by MNP LTD., has found that Albertans are fearful of increased financial turbulence in the wake of future interest rate hikes. The survey found more than one in three Alberta residents now worry future increases could inch them closer to bankruptcy — a four percent increase since June. More than half (55%) are now concerned that future rate increases could impact their ability to pay their debts.

View of Calgary skyline at sunset

With household budgets getting increasingly tighter over the past year, the debt environment across the province is getting even more precarious. Nearly one in two (47%) Albertans now say they regret how much debt they've taken on in their lives – the highest proportion since the MNP Consumer Debt Index began measuring in June 2017.   

Despite these concerns, however, there is still fair bit of optimism about the future. More than one in five (22%) Albertans say their debt situation has actually improved over the past year. And perhaps fuelled by the more than three-quarters (77%) of debtors who resolve to be more careful with how they spend their money as rates increase, one in three (35%) believe their debt situation will improve over the next 12 months. Nearly half of Alberta residents (46%) foresee an improvement over the next five years.

As interest rates continue climbing higher, it's going to be difficult for many to escape the long-term effects — even with better budgeting. It's important for Albertans to understand they don't have to manage the stress, regret and concern on their own. A financial fresh start is possible and a Licensed Insolvency Trustee offers a no obligation Free Confidential Consultation to review debtors' financial situation and discuss options. There is a range of potential solutions to provide relief, but accessing them begins with understanding the various paths available.

Other poll highlights include:

  • Atlantic Canadians show the most trepidation towards increasing interest rates. Sixty-five per cent of Atlantic Canadians say that as interest rates rise, they are becoming more concerned about their ability to repay their debts– ahead of those in Alberta (55%), Saskatchewan and Manitoba (53%), Ontario (52%), and BC and Quebec (both 48%).
  • Atlantic Canadians are most likely to state with rising interest rates they will be more careful with how they spend their money (87%), followed by Saskatchewan and Manitoba (86%), Ontario (83%), Alberta (77%), British Columbia (76%) and Quebec (72%).
  • Concern about rising interest rates triggering a move toward bankruptcy is more pronounced in Atlantic Canada (39%), followed by Alberta, Quebec and Ontario (both 34%), British Columbia (33%), and Saskatchewan and Manitoba (31%).
  • Canadians remain more positive than negative towards their debt situation, as nearly three in ten (28%) rate their current debt situation better than a year ago, and more than one in three (35%) say their debt situation has improved when compared to 5 years prior. Canadians also continue to be hopeful about the future, with four in ten (39%) Canadians believing their expected debt situation a year from now will improve, and half expect their situation to improve within the next 5 years.
  • Albertans (20%) are most likely to say their current debt situation is worse, followed by residents of Atlantic Canada (17%), Saskatchewan and Manitoba (15%), Ontario (13%), Quebec (10%), and British Columbia (8%).
  • Quebec residents (49%) are most likely to rate their personal debt situation as good, followed by residents British Columbia (45%), Ontario (38%), Saskatchewan and Manitoba (34%), Alberta (33%) and Atlantic Canada (28%).

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 September 10  and September 17, 2018. For this survey, a sample of 2,003 Canadians from the Ipsos I-Say panel was interviewed online. The precision of online polls is measured using a credibility interval. In this case, the results are accurate to within +/- 2.5 percentage points, 19 times out of 20, of what the results would have been had all Canadian adults been polled. Credibility intervals are wider among subsets of the population. This represents the sixth wave of the MNP Consumer Debt Index.

To learn more about the survey and how MNP can help you manage your debt challenges, contact Zaki Alam, CIRP, LIT, Senior Vice-President, MNP Ltd., at 1.866.465.1155 or [email protected]

Consultation icon