MNP Consumer Debt Index finds declining financial confidence and increasing debt concerns among Quebecers as result of pandemic

  • Nearly half are concerned about their current debt, more than any other province (+6).
  • Nearly half are not confident they can cover living expenses this year without going further into debt (+12).
  • Half say they could end up in financial trouble if interest rates go up (+12)
  • One in five say their debt keeps them awake at night (+6).
  • One quarter have taken on more debt since March as a direct result of the pandemic.

Montreal skyline during a fall sunset

MONTREAL, QC –January 18, 2021 — As the economic pain and wage losses continue in Quebec as a result of COVID-19, there are signs 2020’s financial stressors will continue well into 2021. The quarterly MNP Consumer Debt Index, which is now in its fifteenth wave, finds nearly half (45%) of Quebecers are not confident they can cover their living expenses for the next year without going further into debt — a 12-point increase from September. Compared to the other provinces Quebecers are the most likely to say they are concerned about their current level of debt (45%, +6). The same number regret the amount of debt they have taken on (45%, +6).

“Financial confidence has plummeted in the province and concern is growing about debt as we approach the one-year mark of the coronavirus crisis. The pandemic has understandably spawned anxiety for those directly impacted by job losses, declining wages, and business closures,” says Frederic Lachance, a Licensed Insolvency Trustee with MNP LTD in Montreal. “But our research shows the pressure is mounting on nearly half of Quebecers.”

The survey found as many as one in four Quebecers (24%) have taken on more debt as a direct result of the pandemic. This includes using credit cards (14%) or lines of credit (7%) to pay off bills, borrowing money from friends or family (7%), taking out a bank loan (3%), or using a payday loan service (3%).

“Financial comfort is a key marker of overall wellbeing. With so many feeling like they can’t afford living expenses without taking on more debt and with so much uncertainty still ahead, the discomfort around the province is palpable,” explains Lachance.

Fewer than three in 10 (27%, +4) Quebecers are confident in their ability to cope with life-changing events without increasing their debt burden.  This includes a change in their relationship status (27%, -4), the death of an immediate family member (22%, -5), or loss of employment or a change in wage or seasonal work (24%, -5).

“The pandemic set unexpected life-changing financial disturbances into motion for many households — many which people never prepared for, and some no one possibly could have. Any unexpected expense or reduction in income has a snowball effect on debt for those who were already cash strapped, as many take on even more credit just to stay afloat.”

With interest rates at an all-time low, nearly six in 10 (57%) feel now is a good time to buy things they otherwise might not be able to afford. In fact, Quebecers (60%) are more likely than any other province to say they’re more relaxed about carrying debt than usual. This may be why fewer (19%) say they’re losing sleep due to COVID-19 economic concerns (-9 since June) or the recession (17%, -5).

“Low interest rates may be providing a false sense of security,” cautions Lachance. “Trying to cope with financial difficulties by taking on additional debt is like trying to fill one hole by digging another.”

The survey highlighted the risks of heavy reliance on credit: Quebec residents (50%) are the most likely to say they’re afraid they could end up in financial trouble if interest rates reverse course, up a significant 12 points since June. Accumulating personal debt is also keeping more up at night, with one in five (20%) indicating debt is interfering with sleep — up six points since June and the largest increase compared to the other provinces. Nearly as many are kept up worrying about how they’ll pay their bills (14%, -2) or afford essentials for their family (13%, +1).

Lachance says shame and pride often cause deeply indebted individuals to draw their situation out for far too long. Some may face aggressive collections activity or debt-relief scams which only result in more stress and sleepless nights.

Licensed Insolvency Trustees can guarantee legal protection from creditors and help people make informed choices to deal with their financial difficulties.

“A Consumer Proposal or Bankruptcy may be a necessary step for some. Others just need reputable advice to develop a budget or a clear plan to get out of debt. Everyone’s situation is different, which is why it’s important to get unbiased advice from a federally regulated Licensed Insolvency Trustee,” says Lachance.

Lachance and his team offer Free Confidential Consultations to help severely indebted Quebecers understand their rights and determine the best path forward. They review an individual’s debt, savings, assets, income, and overall financial situation in order to make specific recommendations. They also provide information about each of the debt-relief options available — from debt reduction strategies and debt consolidation to filing a Consumer Proposal or a Bankruptcy — and explain each in detail.

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 230 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 fifteenth wave, the Index currently stands at 89 points, the lowest reading ever recorded, on the heels of a record-lows in March and September of 2020. Visit MNPdebt.ca/CDI to learn more.

The latest data, representing the fifteenth wave of the MNP Consumer Debt Index, was compiled by Ipsos on behalf of MNP LTD between December 1-3, 2020. 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 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.