Escalating financial concerns in Alberta: Nearly three in five fear they can't repay debts despite interest rate cuts, worries over job loss and Bankruptcy increase

• Half are concerned that rising interest rates could move them towards Bankruptcy (51%, +12 pts).
• Two in five Albertans are worried someone in their household could lose their job (42%, +9 pts).
• Nearly a third say they are already insolvent, unable to cover their bills and debt obligations (32%, +3 pts).
• Two in five (42%, +8 pts) are not confident in their ability to cope with a job loss or change in wages or seasonal work.

CALGARY, AB – January 13, 2025 – Albertans are feeling more pessimistic about their personal finances heading into 2025, despite declining interest rates. According to the latest MNP Consumer Debt Index, Albertans (57%, +14 pts) are among the most likely of those in all the provinces to be concerned about their ability to repay their debts, even if interest rates decline. Nearly three in five Albertans agree they are concerned about debt repayment, marking a staggering 14-point increase since last quarter, the largest increase among all provinces. Half (51%, +12 pts) are concerned that rising interest rates could move them towards Bankruptcy, while two-thirds (67%, -2 pts) still say they desperately need interest rates to go down.

“Last year’s interest rate cuts may have offered some initial reprieve from their financial worries, but many Albertans are entering 2025 with a bleaker financial outlook,” says Lindsay Burchill, a Licensed Insolvency Trustee with Alberta-based MNP LTD. “Holiday bills can put additional pressure on households. Additionally, concerns about potential policy changes such as tariffs and the threat of layoffs may be further fueling financial anxiety across the province.”

This economic uncertainty is reflected in Albertans' rising concerns about job loss. Two in five (42%) are worried that they or someone in their household could lose their job, a notable nine-point increase from the previous quarter. The same proportion (42%, +8 pts) also indicates they lack confidence in their ability to manage a job loss or change in wages or seasonal work.

Slightly more Albertans expect their debt situation to worsen one year from now (16%, +2 pts), and slightly more also anticipate their debt situation will improve (28%, +1 pt). Significantly fewer Albertans (47%, -6 pts) believe they will not be able to cover all their living and family expenses in the next 12 months without going further into debt, although almost half still feel they won’t be able to cover those future expenses.

Albertans’ ability to absorb an extra $130 in interest rate increases has improved this quarter. More (18%, +4 pts) feel much better equipped to handle such an increase. However, the proportion (37%, -1 pt) who report their ability to handle such an increase has worsened remains higher.

"Many have already taken steps to tighten their budgets and reduce costs in response to high living expenses or debt repayment pressures. However, these sacrifices may still fall short of providing the relief they need," explains Burchill. "It's important to remember that help is available for those who need it, and seeking support can make a significant difference in navigating these financial difficulties."

Many Albertans are teetering on the edge of financial insolvency, with more than two in five (43%, -1 pt) still indicating they are $200 or less away from insolvency. The proportion of Albertans who say they are already insolvent increased this quarter, with nearly a third (32%, +3 pts) admitting they already can’t cover their bills and debt obligations.

“Any financial disruption can quickly escalate into a crisis for those living paycheque to paycheque, leaving them especially vulnerable to unexpected expenses or income changes,” says Burchill.

While the new year is traditionally a time for setting financial goals, Burchill says the lingering effects of past financial challenges may overshadow Albertans’ ability to move forward. 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.

“Consulting with a Licensed Insolvency Trustee is crucial to regain control and avoid more serious issues, such as mounting late fees, interest charges, collection calls, or wage garnishments. This initial conversation can help indebted Albertans explore personalized solutions, including debt management plans, budgeting strategies, debt consolidation, Consumer Proposals, and Bankruptcy in some cases.”

MNP’s national team of Licensed Insolvency Trustees offers free consultations across the country to help severely indebted Albertans 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.