Canadians are more worried today about debt, interest rates and personal finances.
And they should be.
According to the latest MNP Consumer Debt Index conducted by Ipsos, 46 per cent of Canadians are $200 or less away from financial insolvency at month-end.
That’s up from 40 per cent in September.
And 31 per cent of Canadians now say they don’t make enough money to cover their bills and debt payments, an increase of seven points over the same period.
“Our research continues to highlight the fact that many Canadians don’t have enough in the budget to make ends meet, let alone address their underlying indebtedness,” said Grant Bazian, president of the country’s largest insolvency firm, MNP Ltd., in a statement.
“Higher interest rates combined with household expenses that outweigh income mean that some are unable to make any kind of meaningful reduction in their debt and, in fact, continue to take on more especially if they encounter unexpected expenses.
“Many have so little wiggle room that any increase in living costs or interest payments can tip them over the edge. That’s what we are seeing happen right now. … For most, the cause of trouble appears to be long-term accumulated debt. It may have been acquired over many years and they managed to pay the monthly interest until now. They just can’t carry it any longer at higher interest rates.”
The report, which was released on Monday, also found:
- 45 per cent of Canadians say they will not be able to cover all living and family expenses in the next year without going into further debt;
- 51 per cent say they are feeling the effects of interest rate increases;
- 41 per cent say that they are not only concerned about their current level of debt, but regret the amount of debt they have taken on (43 per cent);
- 51 per cent are concerned about the impact of rising interest rates on their financial situation;
- significantly more Canadians are worried about their ability to repay debts (57 per cent) and believe they could be in financial trouble (50 per cent) if rates continue to rise;
- 39 per cent are concerned that rising interest rates could move them toward bankruptcy;
- regionally, more Canadians across the country, with the exception of Atlantic Canadians, have seen an increase in the proportion of residents who are within $200 or less of financial insolvency. In particular, residents of Saskatchewan and Manitoba (56 per cent, +8) are the most likely to be financially insolvent, followed by Alberta (48 per cent, +8), British Columbia (41 per cent, +6), Ontario (46 per cent, +6), Quebec (46 per cent, +5) and Atlantic Canada (45 per cent, -4).