Newfoundlanders and Labradorians face ‘heat or eat’ decisions as financial strain deepens

2025-10-06

schedule7 minute read

Author: Tina Powell

MNP Consumer Debt Index

  • A third (34%, +6 pts YoY) have reduced utility consumption, while a quarter (24%, -3 pts) report eating less to save money.
  • Half are within $200 of insolvency each month (+13pts QoQ), marking the largest increase among all provinces.
  • Fewer than half report having six months of emergency savings (42%), leaving many households highly exposed to disruption.
  • Nearly seven in 10 (68%, -1 pt) said they desperately need interest rates to go down – more than any other province; Atlantic Canadians are the most likely to say (51%, -5 pts) even if rates decline, they remain concerned about their ability to repay debt.
  • Adding to these pressures, two in five Atlantic Canadians worry that AI could negatively affect their job or income (42%).

Newfoundland Gros Morne National Park Boardwalk Trail through Highlands in Autumn

JOHN’S, NL – October 6, 2025 – Atlantic Canadians’ financial vulnerability is intensifying as persistent economic uncertainty, concerns about borrowing costs, and employment anxiety weigh on household confidence. Faced with mounting financial pressure, many indebted Atlantic Canadians are being forced into difficult “heat or eat” decisions — choosing between necessities such as heating their homes and putting food on the table. According to the latest MNP Consumer Debt Index, a third (34%, +6 pts) of Atlantic Canadians say they have reduced their utility consumption while a quarter (24%, -3 pts) report eating less to save money. These stark trade-offs reflect the deepening strain on household budgets, particularly as winter heating costs loom.

“Many Atlantic Canadians are finding that even the basics feel out of reach,” says Tina Powell, a local Licensed Insolvency Trustee with MNP LTD. “When households have to scale back on food, heating, or medical care, it goes far beyond tightening the budget — it becomes about making ends meet at the most basic level, and that reality takes a heavy toll.”

Beyond heating and food, Atlantic Canadians are cutting back in other ways. Nearly three in five (58%, +1 pt YoY) say they are grocery shopping strategically by using meal plans, bulk buying, coupons, and price matching. Nearly half are avoiding impulse purchases (45%, unchanged) and have stopped dining out or ordering takeout (47%, unchanged). One in five (19%) are also delaying or skipping medical, dental, or prescription care, highlighting how financial strain is affecting households’ well-being.

Even with these sacrifices, financial cushions are shrinking. Half of Atlantic Canadians report they are within $200 of being unable to pay their bills each month, climbing a significant 13 points since last quarter, increasing more than any other province. At the same time, the average amount left over after monthly expenses has fallen to $802 from $1,028.

“With so many more in the region living just a couple of hundred dollars away from insolvency, there’s almost no room left for error,” adds Powell. “An unexpected bill or higher seasonal costs can push families to lean on expensive credit, and once that cycle begins, the debt can grow quickly.”

Job insecurity and AI concerns add to financial strain

A softening job market is eroding Atlantic Canadians’ confidence in their ability to cope with income disruption, with confidence in handling a job loss falling by two points this quarter to a net negative of 21 points. Against this backdrop, two in five (42%) worry that artificial intelligence (AI) could negatively affect their job or income.

“AI is adding yet another source of worry for Atlantic Canadians already on shaky financial ground,” says Powell. “For those without strong savings, the idea that their jobs or income could be affected only deepens the sense of vulnerability.”

Less than half (42%) of Atlantic Canadians report having six months of emergency savings to withstand a disruption, highlighting just how exposed many households would be if their income were reduced or lost.

Debt outlook darkens as Atlantic Canadians run out of options

Significantly fewer (37%, -8 pts) Atlantic Canadians this quarter rate their debt situation as “excellent,” while more (24%, +5 pts) describe it as “terrible.” Although the Bank of Canada held interest rates at 2.75 percent during the survey period and cut to 2.5 percent shortly after, nearly seven in 10 (68%, -1 pt) Atlantic Canadians said they desperately need rates to go down – more than any other province. They are also the most likely to say (51%, -5 pts) that even if rates decline, they remain concerned about their ability to repay debt. Two in five (42%, -7 pts) worry that rising rates in the future could push them toward Bankruptcy. Significantly fewer this quarter (16%) expect their debt situation to improve in the next year, dropping 15 points — more than any other province. Just three in 10 (30%, -8 pts) expect improvement over the next five years, the lowest of all the provinces.

“While lower interest rates might offer some relief, they don’t erase the debt itself,” explains Powell. “That’s where Licensed Insolvency Trustees can step in — not as a last resort, but as a proactive resource to help people address their debt problems directly and start building stability.”

Despite cost-cutting efforts, the report findings suggest households have exhausted their options. A third (36%, +9 pts YoY) report having no plans to save more in the next 12 months, and only 14 percent (+3 pts) intend to create or revise a household budget. A further 14 percent even plan on eating less (+6 pts) to save money. Additionally, 13 percent (-3 pts) say they plan to reduce utility consumption over the next year — a concerning sign as households head into the winter months.

“When households feel they have no choice but to tighten further, it shows how relentless these financial pressures have become,” says Powell. “Licensed Insolvency Trustees help people see the options that still exist and provide the guidance needed to move forward before the debt situation becomes unmanageable.”

Licensed Insolvency Trustees provide free, confidential consultations and are the only federally regulated debt professionals authorized to administer consumer proposals and bankruptcies. With more than 200 offices across the country, MNP LTD’s team of Licensed Insolvency Trustees deliver local, personalized and non-judgmental guidance to help Canadians understand their options and take the first step toward lasting financial stability.

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 thirty-fourth wave, the Index has fallen by two points from last quarter to 86 points. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between September 4 and September 9, 2025. For this survey, a sample of 2,001 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.

Tina Powell

Tina Powell

CIRP, LIT

Senior Vice President

Servicing: Dartmouth (Venture Run), Bridgewater, Digby, Liverpool, Yarmouth, Windsor (NS), Middleton

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