MNP Consumer Debt Index shows Canadians are bracing for a challenging 2026

Majority of Canadians anticipate higher living costs (71%), rising housing pressure (59%), a worsening economy (59%), interest rate and inflation strain (54%), and job market weakness (52%).

CALGARY, AB – January 12, 2026 – Canadians are bracing for rising financial challenges in 2026, with the majority (71%) expecting the cost of living to worsen. According to the latest MNP Consumer Debt Index, this pessimism extends well beyond prices, reflecting a broader sense that economic conditions will deteriorate.

“Many Canadians believe that household finances will come under increasing pressure, fueling heightened anxiety about economic security in the year ahead,” says Grant Bazian, president of MNP LTD, the country’s largest insolvency firm. “Canadians expect most aspects of daily life to worsen rather than improve in 2026.”

The majority of Canadians believe the economy overall will worsen (59%) this year, and the same proportion expect housing affordability to deteriorate (59%). Canadians also expect rising pressure from interest rates and inflation (54%), unemployment and the job market (52%), and Canada’s relationship with the U.S. (51%). The majority anticipate higher taxes (53%), and approximately half of Canadians expect transportation (50%) and healthcare costs (48%) to worsen. Nearly two-thirds of Canadians also express concerns about rising poverty and inequality (62%) as well as worsening government deficit and debt (66%).

While Canadians are pessimistic about the year ahead, there is some cause for optimism. The MNP Consumer Debt Index increased one point from last quarter to 87 points. This marks the first time that the Index has improved in December since its inception, breaking the typical seasonal trend of deteriorating debt sentiment.

Two in five Canadians (41%) report being $200 or less away from financial insolvency each month, down seven points from last quarter. This marks the lowest level measured in the post-pandemic period. The average amount Canadians have left at the end of the month has risen to $907, up $163 since last quarter. While these gains point to modest financial relief, less than half of Canadians (47%) report having six months of emergency savings, leaving many households vulnerable to disruption.

“Sustained financial pressure is prompting both decisive action and withdrawal among Canadians. Whether Canadians respond to financial stress by taking action or avoiding their debt often comes down to how much financial flexibility they feel they have,” says Bazian. “Financial breathing room has improved for some Canadians, enabling them to make adjustments and seek solutions. Ongoing economic uncertainty continues to drive debt avoidance for others.”

Canadians are responding in markedly different ways as financial pressures intensify. Nearly three in five (59%) are adopting a fight mentality, taking proactive steps such as adjusting their budgets (43%), attempting to consolidate debt (12%), or seeking advice from a financial professional (11%). However, nearly a third of Canadians (32%) are taking a flight response, which includes avoiding thinking about their financial responsibilities (12%), steering clear of financial discussions with family or professionals (15%), or relying on credit to cover essential expenses (17%). More than one in 10 (15%) say they feel financially frozen, unsure where to begin when facing financial stress.

“Many Canadians are in financial flight mode, which can create a false sense of short-term relief,” says Bazian. “Avoiding bills and conversations about finances or relying more heavily on credit can make financial stress feel manageable in the moment, but those behaviours often allow problems to grow quietly in the background. This can make it harder to regain control later on.”

Canadians aged 18-34 are significantly more likely to adopt a flight response (51%) when under financial stress. A third of Canadians earning under $40,000 report similar behaviours (34%). Canadians aged 18-34 are also the most likely to feel financially paralyzed (23%) and are more likely to avoid discussing financial matters with family or professionals (22%).

Interest rates remain a critical source of stress for Canadians, despite the Bank of Canada holding its last policy interest rate at 2.25 percent. Nearly two in three (64%, +1 pt) say they desperately need interest rates to go down. Nearly half (48%, +4 pts) remain concerned about their ability to repay their debts, even if interest rates decline. More than two in five (44%, +2 pts) say they are concerned rising interest rates could drive them toward Bankruptcy.

“Even where Canadians see some improvement in their own debt situation, confidence about the year ahead remains fragile, particularly among those carrying high levels of debt,” says Bazian. “For these households, ongoing affordability challenges and borrowing costs leave little room for error as they head into 2026.”

Relatively few Canadians are turning to professional support when facing financial stress, despite widespread concerns about costs, debt, and the year ahead. Slightly more than one in 10 Canadians (11%) say they have sought advice from a professional as part of their efforts to fight back against financial strain.

These findings echo a recent joint consumer alert from the Office of the Superintendent of Bankruptcy (OSB) and the Canadian Association of Insolvency and Restructuring Professionals (CAIRP). This alert highlighted how stress and stigma can prevent Canadians from asking for help and delay access to guidance from Licensed Insolvency Trustees.

“Too many Canadians are trying to navigate financial challenges in isolation. Licensed Insolvency Trustees are regulated professionals who can help indebted Canadians understand all available debt relief options, make informed decisions, and prevent financial stress from escalating,” says Bazian.

Licensed Insolvency Trustees are the only federally regulated professionals in Canada who can assist with all the debt relief options, including Consumer Proposals and Bankruptcy, stop harassment from debt collectors, and discharge people from debt.

“Many people don’t realize not all debt advice is the same,” says Bazian. “People under financial stress can be vulnerable to misinformation or quick-fix promises. Working with a federally regulated professional such as a Licensed Insolvency Trustee helps Canadians receive unbiased guidance that considers their full financial situation.”

MNP’s national team of Licensed Insolvency Trustees offers free consultations across the country to help severely indebted Canadians get unbiased debt advice, understand their rights, and determine the best path forward.

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 thirty-fifth wave, the Index has increased to 87 points, up one point from last quarter. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between November 28 and December 1, 2025. For this survey, a sample of 2,001 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 ±2.7 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.