Albertans’ concerns about debt and interest rates ease, yet repayment anxiety persists for majority

• Six in 10 are concerned about their ability to repay their debts (62%, -9 pts) and one in five (22%, unchanged) say they are insolvent.
• More than half of Albertans are feeling a social squeeze as the financial pressure of social obligations means many simply can’t afford to participate.
• Three in 10 Albertans say they still haven’t recovered financially from the pandemic four years later.

CALGARY, AB – April 8, 2024 – The latest MNP Consumer Debt Index finds that Albertans are feeling increasingly confident in their personal finances this quarter as interest rate concerns ease. More Albertans perceive their current debt situation to be better (27%, +3 pts) and fewer rated it as much worse compared to a year ago (17%, -4 pts). With the prospect of interest rate cuts on the horizon, fewer this quarter (46%, -4 pts) are concerned about their level of debt. A quarter say they are much better equipped to absorb an interest rate increase of one percentage point (25%, +6 pts) or an extra $130 in interest payments (24%, +7 pts) — increasing significantly from last quarter.

“With interest rates potentially coming down, Albertans’ current debt perceptions are rebounding,” says Donna Carson, a Licensed Insolvency Trustee with Alberta-based MNP LTD. “They are exhibiting more confidence in their debt situation and ability to manage interest rate hikes. However, households in the province are continuing to feel the squeeze from looming mortgage renewals, enduring financial impacts from the COVID-19 pandemic, and cost-of-living pressures.”

While fewer this quarter are concerned about their ability to repay their debts (62%, -9 pts), repayment anxiety persists for the majority of Albertans. Nearly half (47%, -3 pts) regret the amount of debt they’ve taken on in life. A third (34%, -3 pts) of Albertans report being $200 or less away from failing to meet all their financial obligations. This includes one in five (22%, unchanged) who are already technically insolvent and can't cover their bills and debt payments each month. Additionally, more than half (54%, -6 pts) say they will be in financial trouble if interest rates go up much more.

“Albertans currently have the highest level of consumer debt in the country. The data shows many have regrets about their amount of debt and concerns about debt repayment,” says Carson. “It is important to remember that you’re not alone. Many Albertans are struggling with an overwhelming debt burden — and seeking professional debt assistance sooner rather than later can stop the situation from escalating and help chart a course forward.”

Carson says that the shame and guilt associated with unmanageable debt often cause people to delay getting professional assistance. However, this puts them at risk of aggressive collections activity and debt relief scams — resulting in further stress and isolation.

“Debt can be exhausting, lonely, and draining. The persistent cost-of-living crisis only adds to that burden, especially for those who are already stretched thin by the significant increases in food costs and monthly expenses,” explains Carson.

More than half of Albertans (52%) indicate they are feeling a social squeeze on their personal finances and are worried about the amount of money they’ll have to spend on lifestyle and social obligations.

“Many Albertans are feeling overwhelmed and discouraged by how expensive it is to attend or participate in social events or celebrations, such as birthdays, weddings, or graduations. Some may be sinking further into hardship because they simply can’t afford to participate,” explains Carson.

While three in 10 Albertans say they have recovered financially since the start of the pandemic in 2020 (30%), an equal proportion say they are in a worse financial state than they were pre-pandemic (30%).

“Some Albertans are trapped in a cycle of debt due to their overwhelming financial burdens. The fact that nearly a third of Albertans still haven’t recovered financially from the pandemic four years later underscores the ongoing financial challenges,” says Carson. “Seeking professional advice from a Licensed Insolvency Trustee is the best first step towards financial recovery. They can help develop a customized plan to deal with debt. Each person’s situation is unique — which is why it is so important to receive personalized, unbiased advice.”

MNP’s national team of Licensed Insolvency Trustees offers free consultations 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 twenty-eighth wave, the Index increased to 91 points, up eight points since last quarter. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between March 8 and March 15, 2024. 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.