Against the backdrop of a global pandemic, almost half of Canadians are concerned about their debt, a 10-point jump since December

MNP Consumer Debt Index drops to lowest point since tracking began in 2017 

Calgary, AB, March 30, 2020 - The global crisis surrounding COVID-19 has delivered an unprecedented financial shock to Canadians at a time when personal finances were are already a source of stress for many. The latest MNP Consumer Debt Index compiled by Ipsos earlier this month shows Canadians are more worried about their consumer debt than ever before. Almost half (46%) say that they are concerned about their current debt levels, a whopping 10-point jump from the previous wave in December and the highest percentage ever recorded since tracking began.

“Our results underscore how vulnerable Canadian households are to income interruption. Over the next few months we’ll likely see an unfolding of two crises: the global pandemic and the bursting of the Canadian consumer debt bubble,” says Grant Bazian, President at MNP LTD.

The company has been tracking Canadians’ attitudes about their consumer debt and perception of their ability to meet their monthly payment obligations since June 2017. Now in its twelfth wave, the MNP Consumer Debt Index currently sits at 93 points (-3pts), reaching the lowest point ever recorded.

Against the backdrop of a global pandemic, one in three Canadians (34%) are worried either they or someone in their household could lose their job, an increase of seven points since December. One in three (30%, -1pt) say they are not confident in their ability to cope financially with the loss of employment, change in wages or seasonal work without going further into debt.

“Many households were already limited in their ability to face any kind of financial disruption. Now, all Canadians are feeling the effects on their paycheques, pocketbooks and stock portfolios. Those who were already saddled with a lot of debt are in economic survival mode,” says Bazian.

About half (49%, -1pt) of Canadians are teetering on the brink of insolvency, indicating they are $200 or less away from not being able to pay all their bills each month. This includes one quarter (25%) who say they are already unable to meet all their monthly debt obligations.

Bazian says that although lower interest rates, monetary policy interventions and flexibility on the part of lenders will help, managing the crisis will require individuals to go through the right channels for support.

“Losing your income overnight is a terrifying experience. But the important thing is to avoid panicking about your finances during this time. Do not rush out for quick cash like payday loans, run up high-interest credit cards or panic buy household goods,” advises Bazian — adding the following advice for those overwhelmed by debt:

“Focus on the necessities. Communicate with your creditors right away if you are in danger of missing any payments. And seek debt advice from a licensed professional.”

Licensed Insolvency Trustees can guarantee legal protection from creditors as they guide individuals through the Consumer Proposal or Bankruptcy process. As the only government-regulated debt relief professionals, they are empowered to help debtors reorganize their financial affairs and, where appropriate, can even help them avoid Bankruptcy by facilitating an agreement with their creditors.

“When it comes to personal finances, it might seem like the sky is falling; especially for those who were already deeply indebted and have now suddenly lost their jobs. But there is a system in place that can help you achieve financial stability again,” says Bazian.

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 230 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.

In light of the social distancing measures currently in place, MNP LTD is currently offering Free Confidential Consultations via videoconferencing (Skype, Messenger, Zoom, FaceTime, etc.) and by phone. Our team of Licensed Insolvency Trustees are empowered to help those struggling financially to make the most informed choices to deal with their debt during this time.

Visit MNPdebt.ca/get-started-now to book an appointment or to start a live chat.

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. Visit MNPdebt.ca/CDI to learn more.

The latest data, representing the twelfth wave of the MNP Consumer Debt Index, was compiled by Ipsos on behalf of MNP LTD between March 2 and March 5, 2020. 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 the provincial data is available by request.