Rising interest rates and inflation force Manitoba and Saskatchewan residents to make tough budget decisions to make ends meet

Three in 10 will cut back on essentials such as food, utilities and housing; Half will cut back on non-essentials such as travel, dining out and entertainment

  • Six in 10 say they’re already feeling the effects of interest rate increases (61%, +5pts).
  • Half say they’re cutting back on non-essentials such as travel, dining out, and entertainment (52%), more than any other province.
  • Nearly half are buying cheaper versions of everyday purchases (45%), more than any other province.
  • Three in 10 are cutting back on essentials such as food, utilities, and housing (30%).
  • More than half say they will be in financial trouble if rates go up much more (55%), a seven-point jump since last quarter, the largest increase amongst the provinces.
  • Nine in 10 agree they’ll be more careful with how they spend their money with interest rates rising (89%, +7pts), more than any other province.
WinnipegRedRiver

WINNIPEG, MB – July 11, 2022 – Manitoba and Saskatchewan residents are becoming acutely aware of how interest rates and inflation impact their household budgets, as both continue on a months-long upward trajectory. Increasing five points since last quarter, six in 10 (61%) Manitoba and Saskatchewan residents say they're already feeling the effects of interest rate increases, according to the latest MNP Consumer Debt Index, conducted quarterly by Ipsos on behalf of MNP LTD.

Many Manitoba and Saskatchewan residents are having to make tough budget decisions to make ends meet. They're more likely than any other province to say they're cutting back on non-essentials such as travel, dining out, and entertainment (52%). They're also the most likely to be buying cheaper versions of everyday purchases (45%). Two in five are driving less (39%), while three in 10 (30%) are making the difficult decision to cut back on essentials such as food, utilities, and housing. Only one in 10 (7%) don’t have any increased expenses to pay for.

"Everywhere Manitoba residents turn, it's more expensive. Housing is more expensive; driving a car is more expensive; food is more expensive. There's no reprieve," says Tanya Reynolds, a Licensed Insolvency Trustee with MNP LTD in Winnipeg. "They're doing their best to adjust their budgets, but the cost of living is likely to get worse before it gets better. Households could be forced to make increasingly difficult choices about what to cut and may feel the need to take on debt to make ends meet."

As further indication that Manitoba and Saskatchewan residents could be in for a rough rest of the year, more than half (55%) say they will be in financial trouble if interest rates go up much more — a significant seven-point jump since last quarter, the largest increase amongst the provinces. Two in five (38%, +1pt) say rising rates could drive them closer to Bankruptcy.

Six in 10 (63%) Manitoba and Saskatchewan residents say they're concerned about the impact of rising interest rates on their financial situation. That measure is up five points since last quarter and a staggering 18 points since June 2017, the largest increase amongst all the provinces.

Yet far fewer (21%, -8pts) say they're not financially prepared to deal with an interest rate increase of one percentage point. Moreover, fewer are concerned with their ability to cover all living / family expenses in the next year without going further into debt, although nearly half still agree they are concerned (47%, -6pts).

"As inflation nears a 40-year high, there's added pressure to tame it with more aggressive interest rate hikes. Manitoba residents might be surprised how much of an impact future increases could have on their finances and ability to service their debt repayment obligations," says Reynolds.

Compared to the other provinces, Manitoba and Saskatchewan residents are the most likely (89%, +7pts) to say they'll be more careful with how they spend their money as interest rates rise. They're also the most likely to be concerned about their current level of debt (48%, +4pts). Six in 10 (63%, +5pts) say rising interest rates have them more concerned about their ability to pay their debts, and nearly half say they regret the amount of debt they’ve taken on in life (45%, -4pts).

Reynolds advises those concerned about upcoming bills and debt repayments to speak with a federally-regulated Licensed Insolvency Trustee who can help determine the best debt-relief solution through a confidential and unbiased assessment of their financial situation.

"A strict budget is a good start, but it may not be enough to help some individuals fix their financial struggles," says Reynolds. "Only Licensed Insolvency Trustees can provide the full range of options to relieve individuals from their debts and help them to get a fresh financial start, including Consumer Proposals 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 twenty-first wave, the Index has increased three points since last quarter to 90 points, although remaining well below its benchmark score established five years ago. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between June 6 and June 9, 2022. 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.