Seven in 10 Quebecers urgently need interest rates to go down despite interest rate cuts, more than those in any other province

• More than half are $200 or less away from insolvency (53%, +13 pts), and nearly two in five say they are already insolvent (38%, +16 pts) — more than those in any other province.
• More than half believe they won’t be able to cover all living expenses in the next 12 months without going further into debt, more than those in any other province (54%, +6 pts).
• Nearly a quarter say they expect their debt situation to worsen one year from now (23%, +16 pts).

MONTREAL, QC – January 13, 2025 – Quebecers are feeling more pessimistic about their personal finances heading into 2025, despite declining interest rates. According to the latest MNP Consumer Debt Index, more than half of Quebecers (53%) are $200 or less away from insolvency. This 13-point increase from last quarter is the largest amongst the provinces, making Quebecers more likely than those in any other province to report being in this precarious financial position. Nearly two in five say they are already insolvent (38%), a 16-point jump — the highest proportion and the largest increase amongst all provinces.

“Last year’s interest rate cuts may have provided some initial relief from their financial struggles, but far more Quebecers are starting 2025 in a tough financial position,” says Frédéric Lachance, a Licensed Insolvency Trustee with MNP LTD in Montreal. “The holiday bills are arriving, placing a strain on household budgets. Additionally, economic uncertainty, compounded by the U.S. election and concerns about tariffs, may be causing anxiety for Quebecers.”

This economic uncertainty is reflected in Quebecers’ pessimistic outlook on their financial future. Quebecers are the most likely among the provinces to say they expect their debt situation to worsen one year from now (23%), increasing a significant 16 points since last quarter. Fewer this quarter anticipate their situation will improve (29%, -5 pts). Two in five (44%, +9 pts) are worried someone in their household could lose their job. Quebecers are also the most likely (54%, +6 pts) to believe they will not be able to cover all their living and family expenses in the next 12 months without going further into debt.

“While many are already making efforts to tighten their budgets and reduce expenses to manage high costs or debt repayment, these steps may fall short of providing meaningful relief. Some individuals may find that major sacrifices simply aren’t enough to ease their financial burdens or manage their debt, despite lower interest rates,” says Lachance.

Some Quebecers’ attitudes towards their finances and interest rates have softened this quarter after consecutive interest rate cuts in 2024. Two in five (44%) are concerned about their ability to repay their debts even if interest rates decline, a nine-point drop from last quarter. About the same proportion (43%, -4 pts) are concerned that rising interest rates could move them towards Bankruptcy. Quebecers are the most likely (71%) amongst the provinces to say they desperately need interest rates to go down, a nine-point increase since last quarter.

The financial cushion of many households is eroding, as Quebecers’ disposable income has shrunk, leaving less room to manage unexpected expenses. Quebecers experienced a staggering $338 drop in the average amount of money left over at the end of the month this quarter, decreasing to $550 — the lowest amount among all provinces. This was the largest decline of any province and more than double the decrease seen in any other province.

“Households with less financial flexibility are more susceptible to unexpected expenses or the effects of economic shifts,” explains Lachance. “Those already living on a tight budget may find that even a small financial disruption can cause their finances to spiral out of control.”

Quebecers’ ability to absorb an extra $130 in interest rate increases has deteriorated as financial pressures rise. Significantly fewer this quarter (17%, -7 pts) feel much better equipped to handle such an increase, while far more (36%, +8 pts) report their ability to handle this increase has worsened. The possibility of unexpected expenses or changes in circumstances also weighs heavily on Quebecers. Three in 10 (29%, +5 pts) express a lack of confidence in their ability to cope with an unexpected auto repair or purchase, and a third (34%, +8 pts) indicate they are not confident in their ability to cope with a job loss or change in wages or seasonal work.

Lachance says the convergence of post-holiday bills, economic pressures, and unexpected expenses can exacerbate financial challenges. While the new year is traditionally a time for setting financial goals, some Quebecers will find themselves grappling with the financial fallout of holiday spending. Seeking support can help address debt concerns early in 2025.

Reaching out for advice from a Licensed Insolvency Trustee is a critical first step for those feeling overwhelmed by debt. Licensed Insolvency Trustees provide free consultations to help individuals assess their financial situation, understand their options, and create customized plans to regain control of their finances.

“This time of year can feel overwhelming for many as the holiday bills arrive and financial realities set in,” says Lachance. “However, seeking professional advice can provide an opportunity to regain control and avoid more severe financial consequences. The initial conversation with a Licensed Insolvency Trustee can help you explore solutions such as debt consolidation, budgeting, debt management plans, Consumer Proposals, and Bankruptcy in certain cases.”

MNP’s national team of Licensed Insolvency Trustees offers free consultations across the country to help severely indebted Quebecers get unbiased debt advice, understand their rights, and determine the best path forward. Licensed Insolvency Trustees are the only federally regulated debt professionals who can assist with all the debt relief options, including Consumer Proposals and Bankruptcy, stop harassment from debt collectors, and discharge people from debt.

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 thirty-first wave, the Index has decreased to 79 points, down 10 points since last quarter to reach the second-lowest score recorded since its inception. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between December 6 and December 17, 2024. For this survey, a sample of 2,003 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.