Two-thirds of Manitoba and Saskatchewan residents say interest rates will need to drop much further before their financial situation significantly improves — more than any other province

• Nearly four in five say high interest rates have had a negative impact on their household finances, more than those in any other province (77%).
• Two-thirds say they desperately need interest rates to go down (67%).
• Three in five express concern that interest rates may not decline quickly enough to provide the financial relief they need (61%).
• Three in five agree they are still concerned with their ability to repay their debts even if interest rates decline, more than those in any other province (59%).

WINNIPEG, MB – July 22, 2024 – Manitoba and Saskatchewan residents are feeling more pessimistic about their personal finances this quarter, despite the recent interest rate cut by the Bank of Canada. The MNP Consumer Debt Index finds that two-thirds (67%) of Manitoba and Saskatchewan residents say interest rates will need to drop much further before their financial situation significantly improves — more than those in any other province. Three in five express concern that interest rates may not fall quickly enough to provide the financial relief they need (61%), and two-thirds (67%) say they desperately need interest rates to go down.

“Some may be feeling disheartened after hoping for a more significant interest rate cut or a swifter impact from the reduction,” says Tanya Reynolds, a Licensed Insolvency Trustee with MNP LTD in Winnipeg. “With the prices of many daily necessities still high, many Manitoba and Saskatchewan residents have not experienced the kind of decrease needed in their monthly costs to ease the pressure on their finances."

After two years of aggressive interest rate hikes, nearly four in five (77%) Manitoba and Saskatchewan residents say high interest rates have had a negative impact on their household finances — more than those in any other province. They are also the most likely (59%) to agree they are still concerned with their ability to repay their debts, even if interest rates decline. Notably, more than a third (36%) feel they are so heavily in debt that even lower interest rates would offer little relief.

“Some individuals are living paycheque to paycheque, struggling to make ends meet and cover their basic expenses. Meanwhile, others are burdened with such heavy debt that their financial challenges simply won’t be manageable, regardless of interest rates,” says Reynolds.

Nearly half (47%, +2 pts) of Manitoba and Saskatchewan residents are $200 or less away from failing to meet all their financial obligations. Three in 10 (31%, +7 pts) say they already can’t cover their bills and debt payments, a significant increase from the previous quarter.

“Individuals facing financial difficulties should consider reaching out to a Licensed Insolvency Trustee, who can offer an unbiased evaluation of their financial situation and explore tailored debt relief options,” says Reynolds.

Debt perceptions have significantly declined this quarter, following improvements in March. When asked to reflect on their current debt situation compared to one year ago, significantly fewer perceive their current debt situation to be better (21%, -6 pts). Manitoba and Saskatchewan residents are the most likely (23%, +3 pts) among the provinces to rate their current debt situation as much worse compared to a year ago. Two in five (39%, +1 pt) Manitoba and Saskatchewan residents are concerned that they or someone in their household could lose their job.

“People grappling with debt often experience feelings of guilt and embarrassment because of the stigma surrounding this subject. It's crucial to understand that debt is not solely a personal failing. Various external factors can lead to an unmanageable debt burden, including the rising prices of essential goods and high costs of servicing debt — especially credit cards. Increasing mortgage payments and rental expenses, unexpected emergency costs like car or home repairs, fluctuations in income, and job loss all contribute to rising debt,” explains Reynolds.

Two-thirds (65%) of Manitoba and Saskatchewan residents say they will be in financial trouble if interest rates rise. This marks a significant 12-point increase since last quarter, reaching the highest proportion compared to the rest of the provinces. Potentially counting on interest rate cuts to improve their financial situation, nearly half intend to save more (48%), and two in five plan to accelerate their debt repayment (40%) if interest rates drop in the next three months. However, about a quarter (23%) believe that declining interest rates won’t affect them in any way.

“The data shows us that many households in Manitoba and Saskatchewan will likely need support to manage their debt payments in the coming months, regardless of interest rates,” says Reynolds. “Licensed Insolvency Trustees are an accessible resource for Manitoba and Saskatchewan residents, providing customized guidance to help navigate financial uncertainties with informed strategies.”

MNP’s national team of Licensed Insolvency Trustees offers free consultations to help severely indebted Manitoba and Saskatchewan residents 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 twenty-ninth wave, the Index decreased to 85 points, down six points since last quarter. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between June 6 and June 11, 2024. 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.