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

• Seven in 10 say they desperately need interest rates to go down (69%, +5 pts).
• Half are $200 or less away from insolvency (51%, +8 pts), a third are already insolvent (36%, +8 pts).
• More than half are concerned that rising interest rates could move them towards Bankruptcy, more than those in any other province (54%, +13 pts).
• Nearly half are worried someone in their household could lose their job, more than those in any other province (46%, +12 pts).

TORONTO, ON – January 13, 2025 – Ontarians are feeling more pessimistic about their personal finances heading into 2025, despite declining interest rates. According to the latest MNP Consumer Debt Index, Ontarians are among the most likely of those in all provinces (57%, +6 pts) to still be concerned about their ability to repay their debts, even if interest rates decline. Ontarians are also the most likely among those in all provinces (54%) to be concerned that rising interest rates could move them towards Bankruptcy, jumping a significant 13 points from the previous quarter. Seven in 10 (69%, +5 pts) say they desperately need interest rates to go down.

“Ontarians are entering 2025 with a more negative view of their finances compared to those in most other provinces, even after the initial relief from last year’s interest rate cuts,” says Caryl Newbery-Mitchell, a Licensed Insolvency Trustee with MNP LTD in Toronto. “Holiday bills are arriving, putting additional pressure on household budgets. At the same time, economic uncertainty — heightened by the U.S. election and potential tariffs — is likely fueling further anxiety among Ontarians.”

This economic uncertainty is reflected in Ontarians’ pessimistic outlook on their financial future. Significantly fewer this quarter expect their debt situation to improve one year from now (23%, -9 pts), the lowest proportion among all provinces, while a growing proportion anticipate it will worsen (19%, +6 pts). Additionally, Ontarians are the most likely to have anxieties about job loss. Nearly half (46%) are worried someone in their household could lose their job, a considerable 12-point increase from the last quarter. Half (52%) believe they will not be able to cover all their living and family expenses in the next 12 months without going further into debt, increasing a significant nine points.

The proportion of Ontarians teetering on the edge of financial insolvency sharply increased compared to last quarter. Half (51%, +8 pts) now indicate they are $200 or less away from insolvency. More than a third say they are already insolvent (36%), jumping eight points from the previous quarter.

“As the cost of living rises and debt repayment pressures increase, many Ontarians are taking steps to cut costs, reevaluate their budgets, and tighten their finances. However, substantial cost-cutting efforts may still fall short of delivering the financial relief needed in some cases, even with the recent interest rate cuts,” says Newbery-Mitchell.

The financial cushion for many households is eroding as disposable income shrinks, leaving less room to manage unexpected expenses. Ontarians have $161 less left over at the end of the month on average, decreasing to $886 this quarter.

“Reduced financial flexibility makes households more susceptible to unforeseen expenses or the effects of economic shifts,” explains Newbery-Mitchell. “For individuals already struggling to make ends meet, any financial setback can quickly escalate into major hardship.”

Ontarians’ ability to absorb an extra $130 in interest rate increases has deteriorated significantly as financial pressures rise. Ontarians are the least likely among those in all provinces (15%, -8 pts) to feel much better equipped to handle such an increase. Significantly more (40%, +6 pts) report their ability to handle such an increase has worsened. The possibility of unexpected expenses or changes in circumstances also weighs heavily on Ontarians. A third (36%, +6 pts) express a lack of confidence in their ability to cope with an unexpected auto repair or purchase, more than those in any other province. Ontarians are also the most likely (43%, +9 pts) to indicate they are not confident in their ability to cope with a job loss or change in wages or seasonal work.

Newbery-Mitchell 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 Ontarians 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 pressures increase on their finances,” says Newbery-Mitchell. “Reaching out for guidance from a professional can be a pivotal step in regaining control and preventing more serious financial consequences. Starting a conversation with a Licensed Insolvency Trustee opens the door to potential solutions which may include budgeting, debt management plans, 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 Ontarians 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.