More than half of Saskatchewan and Manitoba residents concerned about impact of rising interest rates, jumping a staggering 9 points since September

• Half say (49%) they will be in financial trouble if rates rise, up 12 points since September. Thirty-eight percent say rising rates could move them towards Bankruptcy, more of any other province.
• Nearly half (54%) believe feeding their family has already become less affordable, more than any other province.
• More than a quarter (27%) say they do not have a solid understanding of how interest rates impact their financial situation.
• Eight in 10 (81%) say they will be more careful with how they spend their money with interest rates rising.

R

EGINA, SK – February 22, 2022 – As the country inches closer to the Bank of Canada’s next interest rate announcement on March 2, 2022, many households in Saskatchewan and Manitoba stretched thin by rising costs of living over the COVID-19 pandemic will be bracing for a potentially challenging year ahead. According to a recent poll conducted by Ipsos on behalf of MNP LTD, more than half (55%) of Saskatchewan and Manitoba residents are concerned about the impact of rising interest rates on their financial situation — a nine-point increase from September and the largest jump amongst the provinces. 

About half of Saskatchewan and Manitoba residents say they are more concerned about their ability to repay their debts than they used to be (56%, +5pts). A similar number worry that they will be in financial trouble if interest rates go up much more (49%, +12pts). They are the most likely (38%, +12pts) to agree that rising interest rates could move them toward Bankruptcy, compared to the other provinces. In all three cases, Saskatchewan and Manitoba observed the largest increases across the provinces.

“We are likely to see the first of several interest rate increases this year soon, and as we approach the rate announcement in March, more Saskatchewan and Manitoba residents are concerned about how they will cope with these rate hikes,” says Pamela Meger, a Licensed Insolvency Trustee with MNP LTD in Regina. “Many households are already finding it less affordable to feed their families or pay for things such as housing. Rising interest rates will mean additional debt servicing costs for households who have taken on credit to get by. Those that aren’t able to pay down their debt are the most vulnerable.”

With the price of goods and services rapidly rising, Saskatchewan and Manitoba residents are finding many areas of their day-to-day lives have become less affordable over the past year, including feeding themselves or their family (54%), putting aside money for savings (55%), clothing and other household necessities (42%), transportation (45%), housing (34%), and putting money towards paying down debt (39%). Half (49%) say between three to six of these areas lives have become less affordable.

Further evidence of affordability concerns, eight in 10 (81%, +4pts) say they will be more careful with how they spend their money with interest rates rising.

“Some Saskatchewan and Manitoba residents have taken heed of the discussions happening around impending interest rate increases and begun making necessary adjustments to their mindset. That is encouraging to see,” says Meger. “But it is important to note our findings are impacted by a lack of financial literacy, because we know many Saskatchewan and Manitoba residents don’t understand how their individual financial situation will be affected by future interest rate increases.”  

With many predicting gradual rate hikes throughout 2022, about a quarter (27%, unchanged) say they do not have a solid understanding of how interest rates impact their financial situation. One in five (22%) say they are concerned about their ability to absorb an interest rate increase of one percentage point, jumping a staggering 10 points from September.

“It’s important to understand how to manage debt, especially as we edge towards a higher rate environment. Our hope is anyone who is already struggling or anticipates financial difficulties will seek professional guidance to help better manage their debt situation,” says Meger.

Anyone can obtain a free and confidential assessment of their financial situation with a Licensed Insolvency Trustee at MNP LTD. As the only government-regulated debt professionals, Licensed Insolvency Trustees provide a full range of debt-relief options, including Consumer Proposals, informal debt settlements and Bankruptcies. With specialized debt training and education, Licensed Insolvency Trustees take a customized approach to determine the most suitable debt-relief options. 

Other key poll highlights include:

• Nearly half (49%, +12pts) of Saskatchewan and Manitoba residents say they are already beginning to feel the effects of interest rate increases.
• Nine percent say they will renew their mortgage in the next year, more than any other province.
• One-quarter (28%) say they have only paid the minimum balance on a credit card or personal line of credit.
• One in five (20%) say they have borrowed money they could not afford to pay back quickly, more than any other province.
• One in five (20%) rate their financial situation as ‘poor’.

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 Survey

The data was compiled by Ipsos on behalf of MNP LTD between December 1-7, 2021. 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.