Ontarians’ confidence in personal finances, debt repayment abilities waning amid pandemic fatigue and uncertainty

  • Four in 10 (42%) are not confident they can cover their living expenses this year (+3pts).
  • Fewer than three in 10 (29%) are confident in their ability to cope with unexpected events without increasing their debt burden.
  • Three in 10 say they’re finding it even harder to pay down debt (31%, +2pts).
  • Two in 10 believe their current debt situation is worse than it was a year ago (15%, +3pts).

Toronto skyline at sunset with reflection of skyscrapers in the water

TORONTO, ON – January 17, 2022 – Ontarians’ confidence in their personal finances is waning as uncertainty and pandemic fatigue continue to build amid the spread of the Omicron COVID-19 variant, according to the latest MNP Consumer Debt Index conducted quarterly by Ipsos. Compared to last quarter, fewer Ontarians say they’re confident they can comfortably cover their living expenses in the next year (58%), dropping three points. Four in 10 say they’re concerned about their current level of debt (41%, unchanged).

The MNP Consumer Debt Index, which measures Canadians’ attitudes toward their consumer debt and gauges their ability to pay their bills and endure unexpected expenses, has fallen seven points since last quarter to 88 points, the lowest reading since its inception in June 2017.

“While we do typically see financial optimism wane this time of year as the holiday bills become due, this year has some added pressures that are likely contributing to Ontarians feeling more financially insecure. Notably, the Omicron variant and resulting pandemic fatigue, along with rising inflation and the looming potential for interest rate increases,” says Caryl Newbery-Mitchell, a Licensed Insolvency Trustee with MNP LTD in Toronto. 

With so many Ontarians feeling financial anxiety as coronavirus uncertainty continues, some are uneasy when it comes to financial preparedness for unexpected expenses: Fewer than three in 10 (29%, +1pts) are confident in their ability to cope with life-changing events without increasing their debt burden. More Ontarians (25%) are not confident in their ability to cover an unexpected car repair, jumping a significant five points since September. Three in 10 (31%) are not confident they can cope financially with an illness that renders them unable to work for three months, an increase of three points — and around the same number (32%, -1pt) have concerns about coping with a loss of employment or change in wage or seasonal work. Ontarians are slightly less confident in their ability to cope with the death of an immediate family member (24%, -3pts) or to pay for either their own or someone else’s education (23%, -1pt).

“Unexpected expenses are one of the biggest contributors to serious financial trouble for households. With the province starting the new year with new COVID-19 restrictions and capacity limits, many Ontarians are facing another round of unexpected business closures and reduced working hours or job losses in addition to coronavirus-related health concerns,” says Newbery-Mitchell.

Nearly half (48%) of Ontarians report they are $200 away or less from not being able to meet all their financial obligations at month-end, unchanged from last quarter. This includes nearly three in 10 (28%, unchanged) who say they already don’t make enough to cover their bills and debt payments. Making matters worse, three in 10 (31%, +2pts) say they’re finding it even harder to pay down debt — and two in 10 (19% +2pts) say it has become much less affordable to set aside money for savings.

“As households struggle to manage their debt payment obligations during the pandemic, we’re seeing some resort to credit as a means of keeping up with payments. When there are other stressors like the rising cost of living added to the mix, those households may start digging themselves deeper into debt just to pay for the necessities,” says Newbery-Mitchell.

Compared to the same time last year, more Ontarians are engaging in what many debt professionals consider bad financial habits, such as paying only the minimum balance on their credit card (22%, +4pts) or borrowing money they can’t afford to pay back quickly (12%, +1pt). More Ontarians say they were lured in by deals or special offers such as Black Friday sales this year (11%, +2pts). Additionally, six in 10 (57%, -2pts) Ontarians point to low interest rates as the catalyst for buying things that they might otherwise not be able to afford, down slightly since last quarter.

With concerns over inflation and cost of living at the forefront of many Ontarians’ minds, two in 10 (15%) believe their debt situation is worse than a year ago — an increase of three points since September. Yet, compared to the other provinces, Ontarians are the least likely (44%) to say they regret the amount of debt they’ve taken on; down two points. When looking five years into the future, Ontarians also appear the least likely to be apprehensive about the road ahead, with less than one in 10 (7%, +1pt) believing their debt situation will worsen.

“Ontarians may be feeling desensitized to the weight of their debts as pandemic fatigue sets in. However, I urge people to take a hard look at their finances as holiday bills come due and potential interest rate increases creep closer, and be ready to act swiftly if they see any early warning signs of trouble. Even an anticipated missed payment can be a red flag,” says Newbery-Mitchell. “Rather than taking on more debt, those who are unable to cover their bills should seek the advice of a debt professional.”

Licensed Insolvency Trustees are the only federally regulated debt professionals who can offer guidance regarding all the debt-relief options available to Ontarians. They provide customized, unbiased advice to help individuals make informed choices to deal with debt responsibly.

“Dealing with debt can often feel extremely isolating, but you are not alone. Seeking help from a professional at the first sign of trouble is an important first step to regaining financial stability. It can also help avoid the stress and anxiety caused by the heavy burden of debts, creditor or collection calls, wage garnishments, and tax issues,” says Newbery-Mitchell.

Ontarians 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, they provide a full range of debt-relief options, including Consumer Proposals, informal debt settlements, and Bankruptcy.

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 nineteenth wave, the Index has plummeted seven points since last quarter to 88 points, the lowest reading since its inception in June 2017. Visit MNPdebt.ca/CDI to learn more.

The latest data, representing the nineteenth wave of the MNP Consumer Debt Index, 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.