Risky Financial Behaviours Keeping Canadians In Debt

2020-03-02   minute read

Grant Bazian

MNP Consumer Debt Index

Two in 10 (18%) say they will never be debt free; require just under seven years to be debt free on average.

Calgary, AB, March 2, 2020 — A survey conducted by Ipsos on behalf of MNP LTD helps identify some Canadians’ costly money mistakes which could be contributing to the mounting consumer debt challenges across the country. From making only minimum payments to borrowing money they can’t afford to repay, the survey found more than half of Canadians (53%) admit to engaging in what debt experts consider risky financial behaviours over the past year.

View of Calgary skyline at sunset

“Things like only paying only the minimum, making impulse purchases and taking on debt you can’t afford are risky behaviours because they can trap people in an endless cycle of debt that can be nearly impossible to get out of,” says Grant Bazian, a debt expert and President of MNP LTD, the country’s largest insolvency firm.

Paying only the minimum on debts was the most common risky behaviour among Canadians last year. One in five (21%) said they made only the minimum payment on their credit card and 14 percent said they paid only the minimum on a line of credit. While those across the country were guilty of this to some degree, residents of Saskatchewan and Manitoba (28%) and Alberta (26%) — as well as those with children in the household (33%) were the most likely to admit it.

“For some it might be out of recklessness or impulsivity, but for others it is simply out of necessity. They are having a tough time making ends meet and making questionable money choices in a desperate attempt to stay afloat,” says Bazian.

The second most common financial mistake among Canadians was being lured in by deals and special offers (15%). Those aged 18-34 were the most likely to be seduced by deals (25%), as well as those in households with kids (20%). About 1 in 10 said they spent money they shouldn’t have in order to ‘keep up with the Joneses (11%), made a major purchase on credit without paying it off right away (11%) or bought something on credit that requires no payments for a while (8%).

Cash-strapped, already saddled with debt and struggling to navigate, about 1 in 10 (12%) also admitted to borrowing money they know they can’t afford to pay back.

“A lack of financial literacy may explain why many are engaging in financially risky behaviours. Some are living beyond their means and in denial about their finances, while others are trying their best to get their debts under control but may not have the education or the support to do so effectively,” says Bazian. “Regardless of the reason behind the behaviours, one major contributing factor is the appetite for fast money without considering the longer-term consequences.”

It seems 2 in 10 (18%) Canadians are suffering the consequences of their money mistakes and have lost hope; they say that they will never be debt free. Those in the Atlantic provinces were most likely to share this pessimistic view (25%), followed by Ontarians (21%). Those in British Columbia (13%) and Quebec (12%) are the least likely to think they will never be debt free. Both Gen X and Baby Boomers (20%) were less optimistic than younger Canadians (12%), likely due to years of debt and feeling they are running out of time to pay it off.

Meanwhile, many Canadians believe they can be debt free one day but will still be struggling for years to come. Half (50%) estimate it will take approximately 6 years and 10 months to pay off their debts.

“A lot of people experience hopelessness when it comes to their debt. They don’t want to ask for help, they are embarrassed. They feel they are in it alone and that worsens the problem,” explains Bazian.

About 3 in 10 (32%) Canadians are fortunate enough to say that they are currently living without debt obligations. This is more common among Canadians aged 55 years and older (41%) and 18-34 years (33%). Those aged 35-54 are the least likely to say that they are currently living debt free (21%), most likely owing to the financial obligations of many in this age group in terms of making mortgage payments, raising young children and saving for the future.

“Living debt free can be a reasonable goal for anyone — even the most severely indebted. Licenced Insolvency Trustees can help anyone struggling financially to make the most informed choices to deal with their debt,” says Bazian.  

MNP LTD has an experienced team of Licensed Insolvency Trustees who provide federally regulated debt-relief options, such as Consumer Proposals and Bankruptcies. They offer free consultations in more than 230 offices across the county.  


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 230 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.

About the Survey

This survey was conducted by Ipsos on behalf of MNP LTD between December 4 and December 9, 2019. A sample of 2,000 Canadians aged 18 years and over was interviewed. The precision of online polls is measured using a credibility interval. In this case, the results are accurate to within +2.5 percentage points, 19 times out of 20, of what the results would have been 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 the provincial data is available by request.

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