MNP Consumer Debt Index reveals declining financial confidence and increasing debt concerns among New Brunswick residents as a result of the pandemic

  • Nearly half are not confident they can cover living expenses this year without going further into debt, the highest proportion compared to the other provinces (+11).
  • Far fewer are confident in their ability to weather unexpected expenses without taking on more debt (31%, -7).
  • Three in 10 say they have taken on more debt as a direct result of the pandemic.
  • One quarter say debt keeps them awake at night.

 

View of Saint John from a park overlooking the water

MONCTON, NB –January 18 , 2021 — As the pandemic-related economic pain and wage losses continue in the Atlantic provinces, there are signs 2020’s financial stressors will continue to exact a toll well into 2021. Now in its fifteenth wave, the MNP Consumer Debt Index, which is conducted quarterly by Ipsos on behalf of MNP LTD, finds nearly half (47%) of Atlantic Canadians are not confident they can cover their living expenses for the next year without going further into debt. This represents an 11-point increase from September, and the highest proportion compared to the other provinces.

“Nearly a year into the coronavirus crisis, we can see the serious financial impact it has had on Atlantic Canadians: almost half are concerned about covering their basic expenses,” says Tara Silliker, a local Licensed Insolvency Trustee with MNP LTD. “The pandemic set several unexpected life-changing financial disturbances into motion — many which people didn’t prepare for and some which no one possibly could have. Unexpected expenses are one of the biggest causes of financial hardship.”

Far fewer (31%, -7) Atlantic Canadians say they could cope with life-changing events without increasing their debt burden. Just one in five (23%, -2) feel they could manage a loss of employment or a change in wage or seasonal work, the death of an immediate family member (21%, -4), or a change in their relationship status (27%, -5).

“Financial comfort and preparedness are key markers of an individual’s overall wellbeing. It typically signals trouble ahead when we see so many feeling concerned about the potential for more unexpected financial setbacks — even more so given there is still so much uncertainty ahead,” explains Silliker.

The survey found as many as three in 10 Atlantic Canadians (29%) have taken on more debt as a direct result of the pandemic. This includes using credit cards (12%) or lines of credit (9%) to pay off bills, borrowing money from friends or family (15%), taking out a bank loan (2%), or using a payday loan service (2%). Surprisingly, fewer feel concerned about their current level of debt (41%, -5) or regret the amount of debt they have taken on (42%, -3).

“Low interest rates may be providing a false sense of comfort and security that could put people  in a debt trap,” cautions Silliker. “Trying to cope with debt by taking on additional debt is like trying to fill one hole by digging another.”

Atlantic Canadians (66%) are the most likely in the country to say that the current record low interest rate environment is a good time to buy things that they otherwise couldn’t afford. Half (49%) say they’re more relaxed about carrying debt than they usual. This may be why Atlantic Canadians (14%) are also the least likely to say they are losing sleep due to COVID-19 economic concerns (-19 since June) or the recession (12%, -13).

While fewer Atlantic Canadians are kept up at night worrying about how they’ll pay their bills (23%, -6) or afford essentials for their family (20%, -4), almost half of Atlantic Canadians (47%, -3) are still afraid they could be in financial trouble if interest rates go up. Accumulating personal debt is also keeping some up at night, with one quarter (25%, unchanged) indicating the stress is getting to them.

Silliker says shame and pride often cause deeply indebted individuals to draw out their debt struggles far too long. Many face aggressive collections activity or debt-relief scams, resulting in more stress and more sleepless nights.

“Licensed Insolvency Trustees help people make informed choices to deal with their financial difficulties, and they are the only professionals who can guarantee legal protection from creditors,” explains Silliker.

To help severely indebted Atlantic Canadians understand their rights and determine the best path forward, Silliker and her team offer completely Free Confidential Consultations. During these sessions, 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  Bankruptcy — and explain each in detail.

“A Consumer Proposal or Bankruptcy may be a necessary step for some, but others simply need advice to develop a budget and a plan to deal with their debt. We are specifically trained to help get people out of debt. Everyone’s situation is different, which is why it is best to get advice from a debt professional,” she says.

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 this 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 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.