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

• Four in 10 say they’re concerned about their current level of debt (38%, +5pts).
• Nearly half say they regret the amount of debt they’ve taken on (45%, +4pts).
• Forty-four percent are not confident they can cover their living expenses this year (+1pt).
• A quarter have concerns about coping with a loss of employment or change in wage or seasonal work without increasing their debt burden (26%, +3pts).

MONTREAL, QC – January 17, 2022 – Quebecers report waning confidence in their personal finances as uncertainty and pandemic fatigue continue to build amid the spread of the Omicron COVID-19 variant, according to the MNP Consumer Debt Index which is conducted quarterly by Ipsos. Compared to last quarter, more (38%) Quebec residents say they’re concerned about their current level of debt, jumping a significant five points. Slightly fewer are confident they can comfortably cover their living expenses in the next year (56%, -1pt).

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.

“Household debt is growing increasingly worrisome for Quebecers as we approach nearly two years into the pandemic,” says Frederic Lachance, a Licensed Insolvency Trustee with MNP LTD in Montreal. “We tend to see financial optimism dip as the holiday bills come due, but other factors make this year different than any other. Omicron’s spread and subsequent pandemic fatigue, as well as looming interest rate increases and rising inflation are likely all contributing to Quebecers feeling more financially insecure.”

As coronavirus uncertainty continues, and with many Quebecers feeling financial anxiety, some are understandably uneasy when it comes to their financial preparedness for unexpected expenses. Fewer than one in three (30%, -1pts) are confident in their ability to cope with life-changing events without increasing their debt burden. More Quebecers (26%) also have concerns about coping with a loss of employment or change in wage or seasonal work, jumping three points since September. Around the same number (25%) are not confident they can cope financially with an illness that renders them unable to work for three months, also up three points. Two in 10 (18%, unchanged) are not confident in their ability to cover an unexpected car repair. Similarly, Quebecers are significantly less confident in their ability to pay for either their own or someone else’s education (26%, -5pts).

“We know unexpected expenses are one of the top contributors to households falling into financial crisis. As Quebec begins the new year with more COVID-19 restrictions in place, many have been dealt another round of unexpected business closures, job impacts, and health concerns related to the pandemic. It’s understandable why people are having a hard time seeing the light at the end of the tunnel,” says Lachance.

Four in 10 (41%) Quebecers report they are $200 away or less from not being able to meet all their monthly financial obligations, down two points from last quarter. This includes a quarter (23%, -1pt) who say they already don’t make enough to cover their bills and debt payments. Making matters worse, more Quebecers now say they’re finding it harder to pay down debt (23%, +2pts), and that it has become much less affordable to set aside money for savings (15% +4pts).

“Many households have had their budgets stretched thin during the pandemic. We’ve seen people dig into their savings or resort to credit to cover their debts and bill payments. The rising cost of living may push some of those overextended households to take on more debt so they can cover the cost of basic needs,” says Lachance.

However, Lachance says it’s reassuring to see Quebecers don’t appear to be engaging in what many debt professionals consider bad financial habits as much as the other provinces. Compared to the same time last year, Quebecers are the most likely (58%) to say they haven’t engaged in any of these bad habits and are the least likely to say they’ve only paid the minimum balance on their credit card (14%, -1pt) or borrowed money they can’t afford to pay back quickly (5%, -1pt). Yet some overspending may still be happening; more Quebecers admit they were lured in by deals such as Black Friday offers this year (14%, +4pts). Additionally, six in 10 (60%, +1pt) say low interest rates provide them with a good opportunity to buy things they otherwise might not be able to afford, up slightly since last quarter.

With concerns over inflation and cost of living at the forefront of many Quebecers’ minds, one in 10 (11%) believe their debt situation is worse than a year ago, a striking four-point increase since September. Nearly half (45%, +4pts) say they regret the amount of debt they’ve taken on. When looking five years into the future, some Quebecers appear to be apprehensive about the road ahead, with one in 10 (8%, unchanged) believing their debt situation will worsen.

“A large number of Quebecers admit they’ve taken advantage of interest rates that remained low in 2021 to make purchases they normally might not have been able to afford. They could be approaching a tipping point as holiday bills add stress to household budgets and potential interest rate increases in the near future threaten to make those purchases more unaffordable,” explains Lachance. “Individuals who reach that tipping point may turn to credit to make ends meet, effectively starting a cycle of debt. Those who instead recognize the early warning signs of financial trouble and seek the advice of a debt professional will have peace of mind knowing they have support to deal with their debt.”

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

“Spiralling debt can cause a great deal of stress and anxiety, as can calls from creditors and collection agencies and dealing with wage garnishments and tax issues. Speaking with a professional can help avoid that anxiety. The sooner someone reaches out — for example when they realize they will have to miss an upcoming payment — the sooner they can take that first step to regain financial stability,” says Lachance.

Quebecers 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 fourteenth 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.