Almost sixty per cent of Atlantic Canadians now say they are living within $200 a month of being unable to pay their bills and debt payments each month

Almost 60 per cent of Atlantic Canadians now say they are living within $200 a month of being unable to pay their bills and debt payments each month

MNP Consumer Debt Sentiment Survey reveals serious concern about debt in Atlantic Canada:

• Sixty per cent are concerned about their current level of debt (up 8 points since February), the highest percentage in the country.
• Thirty-two per cent of Atlantic Canadians now say they don’t make enough to cover their bills and debt payments (up 8 points since February).
• Fifty-eight percent regret the amount of debt they’ve taken on (up 4 points since February).

Halifax, NS – Atlantic Canadians are growing more concerned about their amount of debt and their ability to meet their payment obligations. Fifty-nine per cent of Atlantic Canadians now say they are $200 or less per month away from not being able to meet all of their bills or debt obligations each month, an increase of 9 points since February 2016. Thirty-two per cent of this group say they already don’t make enough money to cover them, technically making them financially insolvent. That number represents an increase of 8 points over the same period.

The findings are a part of the MNP Consumer Debt Sentiment Survey, a semi-annual poll designed to track Canadians’ feelings about their debt and their perception of their ability to meet their monthly payment obligations. The survey showed that concern about debt is strongest in the Atlantic provinces, with 60 per cent indicating they are worried about their current debt load, compared with 57 per cent of those in Saskatchewan and Manitoba, 53 per cent in Alberta, 52 per cent in Ontario, 52 per cent in Quebec and 44 per cent in B.C. For many in Atlantic Canada, concern about debt is prompting some soul-searching, with 58 per cent now indicating that they regret the amount of debt that they have taken on.

Derek Cramm, a Halifax-based licensed insolvency trustee with MNP Debt, cites the “Alberta effect” and the rapidly rising senior population as some of the reasons why people are struggling.

“These two groups went from making steady income to suddenly finding themselves without cash flow and are now having to adjust their lifestyles. Given the circumstances, it’s not surprising that Atlantic Canadians are concerned about their debt. What is surprising is the number who say they are living on the edge of financial crisis. Many are tremendously vulnerable to any kind of economic shock; the loss of a job, an emergency, a divorce, a health issue, or any increase in interest rates,” said Cramm.

The survey showed that there is some concern about the potential for rising interest rates among Atlantic Canadians. Thirty-four per cent say they are concerned an increase in interest rates could move them towards bankruptcy. That number is down from thirty-seven percent in February 2016.

Despite the anxiety around debt, over-spending remains a reality. Thirty per cent of parents in Atlantic Canada said they spent more than budgeted on back-to-school shopping for their kids, while 28 per cent ‘agree’ they spent over budget on recreation or vacations during the summer.

“Many have come to rely on cheap credit to fund their lifestyles and a significant number are now adding even more debt. But interest rates will eventually rise. Those who already feel overwhelmed by their debt should seek professional help now. One of the biggest mistakes people make is waiting until the point of devastation before getting help,” said Cramm.

Other key poll highlights include:

• Concern about debt is strongest in the Atlantic provinces where 60 per cent worry about their current debt load, compared with 57 per cent of those in Saskatchewan and Manitoba, 53 per cent in Alberta, 52 per cent in Ontario, 52 per cent in Quebec, and 44 per cent in B.C.
• Fifty-six per cent of Canadians now say they are $200 or less per month away from not being able to meet all of their bills or debt obligations each month, including 31 per cent who say they already don’t make enough money to cover them, technically making them financially insolvent. The proportion of Canadians who say they can’t pay their bills is up 5 points since early 2016 and 10 points since February 2015.
• The concern about the potential for rising interest rates has increased among Canadians. Thirty-eight per cent say they are concerned an increase in interest rates could move them towards bankruptcy, compared to only 31 per cent back in February 2016.
• Parents are more likely to be concerned about their debt situation than other Canadians: six in ten (60 per cent) parents are concerned with their level of debt.
• Debt concerns are also much stronger among middle-aged Canadians; six in ten (60 per cent) Gen Xers are concerned about their debt situation, compared to 52 per cent of Millennials and 43 per cent of Baby Boomers.
• Feelings of regret about debt are most present in Saskatchewan and Manitoba (59 per cent), followed closely by the Atlantic Provinces (58 per cent), Alberta (53 per cent), Ontario (50 per cent), Quebec (49 per cent) and B.C. (43 per cent).
• Residents of Ontario (35 per cent) and Alberta (35 per cent) are the most likely to describe themselves as financially insolvent, followed closely by Saskatchewan and Manitoba (34 per cent), the Atlantic provinces (32 per cent), Quebec (28 per cent) and B.C. (20 per cent).
• In Alberta there was an eighteen point increase in the number of residents who said they are $200 or less per month away from not being able to meet their bills each month. That represented the largest jump across the country followed closely by Saskatchewan and Manitoba (17 per cent).

About MNP Debt

MNP LTD, a division of MNP LLP, is one of the largest personal insolvency practices in Canada. For more than 50 years, our experienced team of Licensed Insolvency Trustees and advisors have been working collaboratively with individuals to help them recover from times of financial distress and regain control of their finances. With more than 200 Canadian offices from coast-to-coast, MNP helps thousands of Canadians each year who are struggling with an overwhelming amount of debt. Visit www.MNPdebt.ca to learn more.

About the MNP Consumer Debt Sentiment Survey

Now in its second year, the MNP Consumer Debt Sentiment Survey is a semi-annual poll designed to track Canadians’ feelings about their debt and their perception of their ability to meet their monthly payment obligations.

The survey was conducted by Ipsos on behalf of MNP Debt between September 6 and September 12, 2016. For this survey, a sample of 1,502 Canadians from Ipsos' online panel was interviewed online. 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 +/ - 2.9 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population.