Nearly half of British Columbians doubtful they can cover living expenses this year without going further into debt (47%, + 9 points)

  • Three in 10 (30%) say the pandemic has worsened their debt or created a larger debt burden for either themselves or their family (36%).
  • A third (31%) of British Columbian homeowners report being house poor.
  • Two in 10 (21%) report being insolvent, down six points since March.

Night view of Vancouver port, downtown lighting up the streets and water

Vancouver, BC – July 19, 2021 – The latest MNP Consumer Debt Index finds the number of British Columbians who are concerned they can’t make ends meet without going further into debt has jumped nine points since March, reaching the highest level since December 2019. The quarterly poll conducted by Ipsos on behalf of MNP LTD finds British Columbians are the most likely (47%, +9pts since March) to say they are not confident they’ll be able to cover all living and family expenses in the next 12 months without spending on credit compared to the other provinces. Half (50%, unchanged) say they are more concerned about their ability to repay their debts than they used to be.

Despite these concerns, fewer (21%, -6pts) report being insolvent or unable to pay their monthly bills and debt obligations. British Columbians are also the most likely (39%) to say they plan to spend more than they normal on things such as travel, dining, and entertainment as they re-engage with the economy.

“Compared to other provinces, British Columbians are the most likely to emerge from their pandemic bubbles and go straight into shopping malls, restaurants and airplanes,” says Linda Paul, a Licensed Insolvency Trustee with MNP LTD in the Lower Mainland. “After months of pandemic savings, I’m urging households not to erase hard-earned gains. The financial damage many experienced because of the pandemic will likely linger for years. Even as many regain full employment, they will still have to deal with new debts they’ve accumulated.”

She points to the survey results showing three in 10 (30%) British Columbians feel the pandemic worsened their debt or created a larger debt burden for either themselves or their family (36%). Part of the reason may be that six in 10 (60%, -3pts) say they’ve taken advantage of low interest rates during the pandemic to make purchases that wouldn’t normally fit within their budget, the highest proportion among the provinces.

While the majority (65%) report they reduced their spending during the pandemic, how much of this was by choice and how much was by necessity is yet unclear. Even those who did not lose a job due to COVID may have made cautionary adjustments to their household budgets or changed their spending habits. Still, as consumer spending flows back into previously closed sectors of the economy, British Columbians are finding themselves with more money at month-end after paying their bills: Households report having an average of $829 left over, $138 more than they had left over in March and the highest amount compared to the other provinces. This may explain why more than half (54%) of British Columbians feel their debt situation is better now than it was before the pandemic started, and four in 10 say they are more relaxed about carrying debt than usual (42%, -1pts).

“It is understandable many are seeking post-pandemic indulgences or wanting to make home upgrades, but even with historically low interest rates the ability to do so is by no means universal. Those who went into lockdown already deeply indebted and then experienced prolonged financial disruption are especially vulnerable,” says Paul.

With lingering pandemic-related uncertainty and the potential for interest rate increases in the future, four in 10 (44%, +1pt) are concerned they will be in financial trouble it if interest rates go up much more. A third (34%, unchanged) would even go so far as to say they are concerned rising interest rates could drive them towards bankruptcy.

“Now is the time for anyone struggling with debt to seek professional debt advice. It’s the first step to getting their finances back on track,” says Paul. “As life slowly gets back to normal, the money management behaviours influenced during the pandemic — such as spending less and saving more — can help all households positively reshape their financial futures and avoid catastrophe if interest rates increase.” 

Homeowners with an outstanding mortgage may be at particular risk. All told, nearly 750,000 homeowners in British Columbia are susceptible to financial disruptions such as an interest rate increase or change to their job situation. Three in 10 (31%) British Columbians who own a home say they are house poor, meaning they don’t have much left over after paying bills related to their home. Perhaps it is therefore not surprising a quarter (25%) of homeowners say they regret the amount of debt they took on to buy their home.

“It’s important to get trusted, customized, unbiased advice. Licensed Insolvency Trustees are the only federally regulated debt-relief professionals. We offer free consultations and advice about the full range of debt-relief options available to Canadians. The earlier you seek help, the more relief options you will have,” adds Paul.

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 seventeenth wave, the Index currently stands at 97 points, up one point compared to the last wave conducted in March 2021. Visit MNPdebt.ca/CDI to learn more.

The latest data, representing the seventeenth wave of the MNP Consumer Debt Index, was compiled by Ipsos on behalf of MNP LTD between June 14-17, 2021. For this survey, a sample of 2,002 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.