Number of Albertans who say they are Feeling the Effects of Interest Rate Increases Jumps Almost 20 per cent Since September

According to a recent Ipsos poll conducted by MNP LTD., higher interest rates are a major concern among Albertans. Rising 19 points since September, nearly two in three (64%) now say they’re feeling the pinch. Close to two in five (37%) also say they don’t earn enough money to cover their bills and debt payments — that 15 percent jump is the highest of any province. Consequently, more than half (54%) expect to take on more debt over the next 12 months just to cover living and family expenses.

View of Calgary skyline at sunset

Likewise, the number of Albertans who are within $200 of financial insolvency at month-end rose significantly over the previous quarter, now close to half of households in the province (48%, +8%). And less than three in ten are confident they could cope financially with an unexpected life event or expense.

At the crux of these concerns is the increased cost to service debt. Combined with existing living and family costs, it is becoming it more difficult to reduce the principal value of those debts. Making matters worse, many face the prospect of an even more dire financial situation if a family member were to lose a job or there was a decrease in household income.

Compared to other provinces, Albertans are the most likely to worry about their ability to repay debts (63%, +8%), to be at risk of financial jeopardy if rates continue to rise (57%, +8%) and to worry future increases could push them toward bankruptcy (48%, +14%). Resultingly, more than half (55%) are worried about the effects of rising interest rates on their finances.

As the edge nears closer for many people, it’s important to be aware there are systems in place to help provide stability and peace of mind to severely indebted Canadians. Seeking help from a Licensed Insolvency Trustee is, in many cases, the best route to get the relief and financial fresh start they deserve.

Click here to view our digital infographic and learn more insights from this quarter’s MNP Consumer Debt Index.

Other MNP Consumer Index highlights include:

  • One third (34%) of Canadians say they are worried that someone in their household or themselves will become unemployed.
    • Regionally, more Canadians across the country, with the exception of Atlantic Canadians, have seen an increase in the proportion of residents that are within $200 or less of financial insolvency. In particular, residents of Saskatchewan and Manitoba (56%; +8pts) are the most likely to be financially insolvent, followed by Alberta (48%; +8pts), British Columbia (41%; +6pts), Ontario (46%; +5pts), Quebec (46%; +5pts) and Atlantic Canada (45%; -4pts).
    • Less than four in ten Canadians say they are confident in their ability to cope financially if an unexpected life-changing event were to occur, including: a change in relationship status (36%), having an illness and being unable to work for three months (33%), an unexpected auto repair (31%), loss of employment (30%), a death of an immediate family member (30%) or paying for own or someone else’s education (29%).
    • A year from now, nearly four in ten (36%) Canadians expect their debt situation to improve, whereas nearly half (47%) are counting on the future for improvement, indicating they expect their debt situation to get better five years from now. Though, regardless of the amount of time allotted, net positivity has significantly decreased since September, indicating Canadians are becoming less optimistic about their future debt situation.Fewer Canadians believe in their ability to absorb an interest rate increase of one percentage point or an additional $100 in interest payments, as the gap between those who say it is getting better than worse is tapering.

    About MNP Debt

    MNP LTD, a division of 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 Canadian offices from coast-to-coast, MNP helps thousands of Canadians each year who are struggling with an overwhelming amount of debt. Visit www.MNPdebt.ca to contact a Licensed Insolvency Trustee or get a free checkup for your debt health using the MNP Debt Scale.

    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, follow a budget 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. Visit www.MNPdebt.ca/CDI to learn more. The latest Index data was compiled by Ipsos on behalf of MNP LTD between December 7 and December 12. For this survey, a sample of 2,154 was interviewed online. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.4 percentage points, 19 times out of 20, had all Canadian 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.