Six in 10 Nova Scotians concerned about impact of rising interest rates, up four points since September

• More than half (54%) say they will be in financial trouble if rates rise, more than any other province.
• Thirty-seven percent say rising rates could move them towards Bankruptcy.
• More than four in 10 (45%) believe feeding their family has already become less affordable.
• Three in 10 (28%) say they do not have a solid understanding of how interest rates impact their financial situation, more than any other province.
• Nearly nine in 10 (86%) say they will be more careful with how they spend their money with interest rates rising.

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ALIFAX, NS – February 22, 2022 – As the country inches closer to the Bank of Canada’s next interest rate announcement on March 2, 2022, many Atlantic Canadian households stretched thin by rising costs of living over the COVID-19 pandemic will be bracing for a potentially challenging year ahead. Nearly six in 10 (57%) Atlantic Canadians are concerned about the impact of rising interest rates on their financial situation, a four-point increase from September, according to a recent poll conducted by Ipsos on behalf of MNP LTD.

Compared to other regions in Canada, Atlantic Canadians are the most likely to say they are more concerned about their ability to repay their debts than they used to be (62%, +1pt). They’re also the most likely to worry they will be in financial trouble if interest rates go up much more (54%, +1pt). While fewer believe rising interest rates could move them toward Bankruptcy, nearly four in 10 (37%, -6pts) still agree they could find themselves in that position should rates rise, more than the national average.

“The rate announcement this March is likely to be the first in a series we will see this year. As we approach that date, more Atlantic Canadians are concerned about how they would cope financially,” says Tina Powell, a local Licensed Insolvency Trustee with MNP LTD. “Individuals who have resorted to credit to get by and are not capable of paying down that debt are the most vulnerable to rate hikes. Atlantic Canadians are already finding it less affordable to feed their families or pay for things like housing. Added debt servicing costs will only make things more unaffordable.”

With the price of goods and services rising rapidly, Atlantic Canadians are finding many areas of their day-to-day lives have become less affordable that over the past year, including feeding themselves or their family (45%), putting aside money for savings (50%), clothing and other household necessities (40%), transportation (42%), housing (30%), and putting money towards paying down debt (40%). Nearly half (47%) say between three to six of these areas of their lives have become less affordable.

Further evidence of affordability concerns, Atlantic Canadians are the most likely compared to the other provinces (86%, -1pt) to say they will be more careful in how they spend their money with interest rates rising.

“Considering Atlantic Canadians are the most worried about rate hikes putting them in financial trouble, it’s encouraging to see the majority are adjusting their mindset about spending,” says Powell. “At the same time, a lack of financial literacy impacts our findings, because we know an increasing number of Atlantic Canadians don’t fully understand how their finances will be affected by interest rate increases.”  

With many predicting gradual rate hikes throughout 2022, Atlantic Canadians are the most likely (28%) to say they do not have a solid understanding of how interest rates impact their financial situation, jumping a significant seven points from September. A quarter (24%) say they are concerned about their ability to absorb an interest rate increase of one percentage point, up a staggering 10 points from September.

“We are hoping that anyone who is already struggling financially now, or anticipates they will be in trouble soon, will seek professional guidance to help manage their debt, especially if they are unsure about managing that debt in a higher rate environment,” says Powell.

Anyone 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, Licensed Insolvency Trustees provide a full range of debt-relief options, including Consumer Proposals, informal debt settlements and Bankruptcies. With specialized debt training and education, Licensed Insolvency Trustees take a customized approach to determine the most suitable debt-relief options. 

Other key poll highlights include:

• Atlantic Canadians are the most likely (55%, +7pts) to say they are already beginning to feel the effects of interest rate increases compared to the other provinces.
• Five percent say they will renew their mortgage in the next year.
• One in three (33%) say they have only paid the minimum balance on a credit card or personal line of credit, more than any other province.
• Fifteen percent say they have borrowed money they could not afford to pay back quickly.
• Fifteen percent rate their financial situation to be poor.

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 Survey

The data 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.