Manitoba and Saskatchewan residents’ confidence in personal finances, debt repayment abilities plummets amid pandemic fatigue and uncertainty

• Nearly half are not confident they can cover their living expenses this year (49%, +4pts)
• Four in 10 say they’re concerned about their current level of debt (44%, +8pts)
• Less than a quarter are confident in their ability to cope with unexpected events without increasing their debt burden (24%, -6pts).
• Two in 10 believe their current debt situation is worse than it was a year ago (20%, +10pts).
• Four in 10 say they’re finding it even harder to pay down debt (39%, +9pts)

WINNIPEG, MB – January 17, 2022 – Manitoba and Saskatchewan residents’ confidence in their personal finances has plummeted as uncertainty and pandemic fatigue continue to build amid the spread of the COVID-19 Omicron variant, according to the latest MNP Consumer Debt Index conducted quarterly by Ipsos. Compared to last quarter, fewer Manitoba and Saskatchewan residents are confident they can comfortably cover their living expenses in the next year (51%, -4pts) and far more say they are concerned about their current level of debt (44%, +8pts).

“Nearly two years into the pandemic, it’s getting harder for people to see the light at the end of the tunnel. Financial confidence is waning,” says Tanya Reynolds, a Licensed Insolvency Trustee with MNP LTD in Winnipeg. “We typically see financial optimism dip as the holiday bills become due, but the Omicron variant and resulting pandemic fatigue, as well as rising inflation and potential upcoming interest rate hikes are likely contributing to Manitobans feeling more financially insecure this year.”

As coronavirus uncertainty continues, and with so many Manitoba and Saskatchewan residents feeling financial anxiety, far more are uneasy when it comes to being prepared financially for unexpected expenses. Less than a quarter (24%, -6pts) are confident in their ability to cope with life-changing events without increasing their debt burden. One in three (34%) are not confident in their ability to cover an unexpected car repair, a staggering jump of 10 points since September. About the same number (33%, +4pts) have concerns about coping with a loss of employment or change in wage or seasonal work. Four in 10 (39%) are not confident they can cope financially with having an illness that renders them unable to work for three months — also up a significant 10 points. Similarly, Manitoba and Saskatchewan residents are slightly less confident in their ability to handle a change in their relationship status (24%, -2pts) or cope with the death of an immediate family member (18%, -2pts).

“We often find unexpected expenses are one of the main contributors to people falling into a cycle of debt. As we start the new year, these concerns are heightened by growing uncertainty surrounding more unexpected business closures, job loss or work hours being reduced, and health concerns related to COVID-19,” says Reynolds.

Nearly half (49%) of Manitoba and Saskatchewan residents report they are $200 or less away from not being able to meet all their financial obligations at month-end, down just one point from last quarter. This includes a quarter (25%, unchanged) who say they already don’t make enough to cover their bills and debt payments. Making matters worse, significantly more (39%, +9pts) Manitoba and Saskatchewan residents say they’re finding it harder to pay down debt, and a quarter (26%, +11pts) say it’s become much less affordable to set aside money for savings. In both cases, these are the largest increases compared to the other provinces.

“The pandemic has stretched many household budgets thin, causing some to resort to credit to help make ends meet. Now, the rising cost of living could push these already overextended households further into debt just to afford the necessities,” says Reynolds.

Compared to the same time last year, more Manitoba and Saskatchewan residents are engaging in what many debt professionals consider bad financial habits — such as paying only the minimum balance on their credit card (24%, +8pts). Compared to the other provinces, Manitoba and Saskatchewan residents are the most likely to admit to borrowing money they can’t afford to pay back quickly (20%, +7pts). More say they were lured in by deals or special offers on days such as Black Friday this year (11%, +5pts). Additionally, six in 10 (60%) point to low interest rates as the catalyst for buying things they otherwise might not be able to afford, a staggering seven-point increase since last quarter.

With concerns over inflation and cost of living at the forefront of many Manitoba and Saskatchewan residents’ minds, two in 10 (20%) believe their debt situation is worse than a year ago — a striking increase of 10 points since September and the largest jump compared to the other provinces. Manitoba and Saskatchewan residents are the most likely (52%, +2pts) to say they regret the amount of debt they’ve taken on. Significantly more appear to be apprehensive about the road ahead. When looking five years into the future, two in 10 (15%) believe their debt situation will worsen. That 10-point increase is the largest among all provinces.

“Manitobans took advantage of rock-bottom interest rates in 2021 to make purchases they might normally not have been able to afford. As holiday bills become due, that could stress their budgets. With the potential of interest rate increases in early 2022, we can see a tipping point may not be far off,” explains Reynolds. “Acting when you first see the warning signs of financial trouble  — even an anticipated missed payment — and seeking the help of a debt professional is the best way to avoid that tipping point. Don’t take on more debt in an attempt to mask the problem.”

Licensed Insolvency Trustees are the only federally regulated debt professionals who can offer guidance regarding all the debt-relief options available to Manitobans. They provide customized, unbiased advice to help individuals make informed choices to deal with debt responsibly.

“Many people struggle for years alone, plagued by the anxiety of their growing debts, calls from creditors or collection agencies, wage garnishments, and tax issues. Speaking with a professional at the first sign of trouble can provide peace of mind and help you make that first step to regaining financial stability," says Reynolds.

Manitobans can obtain a free and confidential assessment of their financial situation with a Licensed Insolvency Trustee at MNP LTD. As the only government-regulated debt professionals, they provide a full range of debt-relief options, including Consumer Proposals, informal debt settlements, and Bankruptcy.

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 nineteenth wave, the Index has plummeted seven points since last quarter to 88 points, the lowest reading since its inception in June 2017. Visit MNPdebt.ca/CDI to learn more.

The latest data, representing the nineteenth wave of the MNP Consumer Debt Index, was compiled by Ipsos on behalf of MNP LTD between December 1-7, 2021. 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.

A summary of some of the national data is available by request.