MNP Consumer Debt Index reveals pandemic impact on personal finances and consumer debt in Manitoba and Saskatchewan

• Four in 10 not confident they can cover living expenses this year without going further into debt (-1).
• Four in 10 are concerned about their current debt (-2).
• Fewer are confident in their ability to cope with unexpected expenses without taking on more debt (27%, -1).
• Half say they could be in financial trouble if interest rates increase (+4).
• Three in 10 say they have taken on more debt as a direct result of the pandemic.

WINNIPEG, MB –January 18 , 2021 — As the pandemic-related economic pain and wage losses continue, 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 finds four in 10 (42%) Manitoba and Saskatchewan residents are not confident they can cover their living expenses for the next year without going further into debt, a one-point drop from September. The survey, which is conducted quarterly by Ipsos on behalf of MNP LTD, also reveals around the same number feel concerned about their current level of debt (40%, -2) or regret the amount of debt they have taken on (41%, -8).

“The coronavirus crisis has understandably created financial anxiety for those directly impacted by job loss, declining wages and business closures. But our research shows debt pressure is affecting a large proportion of the province,” says Gord Neudorf, a Licensed Insolvency Trustee with MNP LTD in Winnipeg.   

The survey found three in 10 Manitoba and Saskatchewan residents (28%) have taken on more debt as a direct result of the pandemic. This includes using credit cards (13%) or lines of credit (9%) to pay off bills, borrowing money from friends or family (14%), taking out a bank loan (2%), or using a payday loan service (4%).

“Unexpected crises are the biggest cause of serious financial trouble. The pandemic set many unexpected life-changing financial disturbances into motion — many which people didn’t prepare for and some which no one possibly could have. Any reduction in household income or unexpected expense can have a snowball effect for those already cash strapped, especially when they take on even more credit just to stay afloat,” says Neudorf.

Fewer than three in 10 (27%, -1) Manitoba and Saskatchewan residents are confident they could cope with life-changing events such as loss of employment or a change in wage or seasonal work (27%, +1) without taking on more debt. Significantly fewer feel they could cope financially with the death of an immediate family member (18%, -9), or a change in their relationship status (25%, -10).

“Financial preparedness is a key measure of an individual’s overall wellbeing. To see so many people feeling like they can’t afford living expenses let alone unexpected expenses signals more financial turmoil on the horizon — particularly with so much uncertainty still ahead,” explains Neudorf.

With interest rates at a record low, more than half (56%) of Manitoba and Saskatchewan residents feel now is a good time to buy things they otherwise couldn’t afford. Nearly half (45%) say they’re more relaxed about carrying debt than usual. As many adjust to a the new normal, fewer (22%) say they’re losing sleep due to COVID-19 economic concerns (-17 since June) or the recession (16%, -13).

“Some risk being lulled into a false sense of security that could leave them in a debt trap,” cautions Neudorf.

Accumulating personal debt is also keeping fewer up at night; one in four (25%) Manitoba and Saskatchewan residents indicate their debt is getting in the way of a restful night’s sleep, down 11 points since June. Fewer are losing sleep over how they will pay their bills (23%, -11) or afford essentials for their family (16%, -12) as well. However almost half of Manitoba and Saskatchewan residents (47%, +4) are afraid they could end up in financial trouble if interest rates go up.

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

“Licensed Insolvency Trustees can guarantee legal protection from creditors and help people make informed choices to deal with their debt,” she explains. “Anyone facing a pile of bills they know they can’t afford should get professional advice right away. It costs nothing to get an opinion.” 

Neudorf and his team offer Free Confidential Consultations to help those struggling financially understand their rights and determine the best path forward. 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.

“We are trained to find people a path out of debt, no matter how dire the situation. A Bankruptcy or Consumer Proposal may be necessary for some, but others simply need advice to develop a budget and plan to deal with their debt. As government-licensed Licensed Insolvency Trustees, we can help with that,” he 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 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.