Fear Of Rate Hikes Continues To Intensify Among Quebec Residents

2018-10-22   minute read

Frederic Lachance

MNP Consumer Debt Index

A recent Ipsos poll conducted by MNP LTD., has found that Quebec residents are fearful of increased financial turbulence in the wake of future interest rate hikes. With a six percent increase since June, the survey found more than one in three Quebec residents now worry future increases could inch them closer to bankruptcy. Nearly half (48%) are beginning to question their ability to repay their debts if rates continue to climb – rising four percent over the past quarter – and slightly less than half (45%) say future increases could lead to financial trouble. Perhaps most concerning, a full two in five Quebeckers (41%) say they're feeling the effects of previous interest rate increases. Reflecting a 13 percent spike, that's the largest increase of any province.

Montreal skyline during a fall sunset

This contrasts heavily with the previous MNP Consumer Debt Index measured in June 2018. The index score measuring Canadians attitudes about debt and perceptions about their ability to meet monthly payment obligations dropped three points to 103 following last quarter's record high. While it suggests that people are feeling better now than they have historically, it also indicates that the current situation is precarious and at the mercy of the Bank of Canada's interest rate increases – expected to ramp up in the months ahead.

Despite the likelihood of trouble, however, Quebec residents appear to feel the situation is at least partially within their own control. With seven in ten saying rising interest rates will cause them to be more careful with their spending, many are confident things will steadily improve over the short and long term. One in three (33%) Quebeckers say their debt situation is better now than one year ago, the highest of any province. Nearly two in five (37%) expect their debt situation to improve over the next 12 months and almost half (48%) predict an improvement over the next five years. 

However, seeing that two in five people in the province are either concerned about their current debt burden (42%) or regret the amount of debt they've taken on in life (40%) suggests lower spending may not be enough to avoid further difficulty. It's certainly positive to see that Quebec residents know things need to change, but too many remain reluctant to seek professional assistance. Whether they're fearful about the consequences or simply don't know the opportunities for a financial fresh start, we encourage anyone who is struggling or concerned to investigate their options and meet with a Licensed Insolvency Trustee for a no obligation Free Confidential Consultation to learn more.

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.

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