Update Quebecers Concerns About Debt Softening Yet Many Still Struggling To Make Ends Meet

2019-04-22   minute read

Frederic Lachance

MNP Consumer Debt Index

Quebecers are the least likely to say they regret the amount of debt they have taken on in their life compared to other provinces, down 3 points. Half are $200 or less away from financial insolvency, up 5 points.     

MONTREAL, QC – Quebec residents are starting to feel better about their consumer debt situation and personal finances than just a few months ago, however many are still struggling, according to the latest MNP Consumer Debt Index. The quarterly survey conducted by Ipsos on behalf of MNP LTD, finds that half (51%) of Quebec residents say they are hovering close to financial insolvency at the end of the month, just $200 or less away from not being able to pay their bills, an increase of five points since December. This includes one in four (27%) who say they have no wiggle room at month-end, as they already don’t make enough to cover their bills and debt payments.

Montreal skyline during a fall sunset

“When there is this little room in the household budget, people can easily get trapped in an endless cycle of debt,” says Frédéric Lachance, a Licensed Insolvency Trustee at MNP LTD, the country’s largest insolvency firm. “This isn’t simply a matter of people living beyond their means. The reality is that too many households simply cannot make ends meet, however hard they try.”

Since September 2018, Quebecers’ perception of their debt situation has been on a gradual decline. Half of Quebec residents are worried about their ability to repay debts (49%; -3pts), and four in ten believe they could be in financial trouble (43%; -2pts) if interest rates increase. Thirty-one per cent of Quebecers are concerned rising interest rates could move them towards bankruptcy, down two points.

“A lot of people in the province are maxed out with no real plan for paying back what they have borrowed. This raises many questions about how and if consumer debt will be repaid, particularly if conditions deteriorate or interest rates rise,” says Lachance.

As the Bank of Canada has held interest rates steady recently, concerns over interest rates have softened somewhat since December. Still, four in ten (40%) say they are concerned about the impact of rising interest rates on their financial situation.

Quebec residents appear to be heeding the red flags about where the economy and interest rates are heading, choosing to slow down their borrowing. While slightly more Canadians report taking on consumer debt compared to this time last year, Quebec residents are the least likely (62%) to say they have. They are also the least likely to say they are concerned about their current level of debt (35%; +1pt) or regret the amount of debt they have taken on in their life (32%; -3pts).

“It used to be that people would save for big purchases and have some money tucked away for emergencies. Now they look to credit cards or other forms of debt when it comes to paying for unexpected car repairs, home maintenance, and even basic household expenses. Paying down debt or saving for the future is seen as more of a luxury than a necessity,” says Lachance.

Compared to December, fewer Quebecers (42%; -4pt) say they won’t be able to cover all living and family expenses in the next 12 months without taking on more debt.

Despite the fact Quebecers’ debt anxieties have subsided somewhat, they are slightly less optimistic about their financial future, with a third (32%) expecting their debt situation to improve a year from now, down two points. Five years from now, four in ten (41%) believe their situation will improve, also down two points.

“Confronting debt can be a depressing reality at first, but with the numerous options available, debt relief is possible,” says Lachance. “The first step is to ask for help from a licensed professional.”

Licensed Insolvency Trustees are the only federally regulated debt professionals empowered to provide a full range of debt relief options including consumer proposals, bankruptcies, informal debt settlements, and debt consolidation.

About MNP Debt

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 Canadian 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 get a free checkup for your debt health using the MNP Debt Scale. 

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, follow a budget, 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. Visit MNPdebt.ca/CDI to learn more. The latest Index data was compiled by Ipsos on behalf of MNP LTD between March 13 and March 24, 2019. For this survey, a sample of 2,070 was interviewed online. 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 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.

Consultation icon