Half of Quebecers concerned about impact of rising interest rates, up four points since September

• Four in 10 (44%) say they will be in financial trouble if rates rise, 34 percent say rising rates could move them towards Bankruptcy.
• Half (51%) believe feeding their family has already become less affordable.
• Two in 10 (21%) say they do not have a solid understanding of how interest rates impact their financial situation.
• Eight in 10 (78%) say they will be more careful with how they spend their money with interest rates rising.

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ONTREAL, QC – February 22, 2022 – As the country inches closer to the Bank of Canada’s next interest rate announcement on March 2, 2022, many Quebec households stretched thin by rising costs of living over the COVID-19 pandemic will be bracing for a potentially challenging year ahead. Half (51%) of Quebecers are concerned about the impact of rising interest rates on their financial situation, a four-point increase from September, according to a recent poll conducted by Ipsos on behalf of MNP LTD.

About four in 10 (44%, +3pts) worry they will be in financial trouble if interest rates go up much more while 34 percent (unchanged) agree rising interest rates could move them toward Bankruptcy. While fewer say they’re more concerned about their ability to repay their debts than they used to be, nearly half (47%, -5pts) still agree they are worried about those debt repayment obligations.

“We are fast approaching what is likely to be the first of multiple interest rate hikes in the coming year, and rightly so, Quebecers are concerned about how they would cope,” says Frederic Lachance, a Licensed Insolvency Trustee with MNP LTD in Montreal. “Households that piled on credit to stay afloat and aren’t capable of paying down the debt they have incurred are most vulnerable. The increased debt servicing costs are hitting Quebecers at a time when many are already finding it more challenging to pay for basic household necessities, housing, and food for their families.”

With the price of goods and services rapidly rising, Quebecers are finding many areas of their day-to-day lives have become less affordable over the past year, including feeding themselves or their family (51%), putting aside money for savings (38%), clothing and other household necessities (41%), transportation (33%), housing (34%), and putting money towards paying down debt (23%). More than four in 10 (44%) say at least half of these areas of their lives have become less affordable.

Yet while many have concerns over affordability, Quebecers are the least likely (78%) among the provinces to say they will be more careful with how they spend their money with interest rates rising, down five points from September.

“I would urge Quebecers to consider adjusting their mindset and spending behaviour accordingly. With interest rate increases imminent, this is a time when we want to see more, not fewer, individuals being cautious with their spending. Particularly since our findings show more Quebecers are concerned about the impact of rising interest rates on their finances, and more also say they understand how rate increases will affect their financial situation,” says Lachance.

With many predicting gradual rate hikes throughout 2022, about two in 10 (21%, -3pts) Quebecers say they do not have a solid understanding of how interest rates impact their financial situation. Nearly two in 10 (15%) say they are concerned about their ability to absorb an interest rate increase of one percentage point, up four points from September.

“Individuals should be assessing whether they can manage their debts in a higher rate environment. Our hope is those who are already struggling, or who anticipate financial struggles in response to rising interest rates, will seek professional guidance to get help with their financial situation,” says Lachance.

Anyone can obtain a free and confidential assessment of their financial situation with a Licensed Insolvency Trustee at MNP LTD. As the only government-regulated debt professionals, Licensed Insolvency Trustees provide a full range of debt-relief options, including Consumer Proposals, informal debt settlements and Bankruptcies. With specialized debt training and education, Licensed Insolvency Trustees take a customized approach to determine the most suitable debt-relief options. 

Other key poll highlights include:

• Nearly half (41%, -2pts) of Quebecers say they are already beginning to feel the effects of interest rate increases.
• Four percent say they will renew their mortgage in the next year.
• Nearly two in 10 (18%) say they have only paid the minimum balance on a credit card or personal line of credit.
• Five percent say they have borrowed money they could not afford to pay back quickly.
• One in 10 (10%) rate their financial situation as ‘poor’.

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 Survey

The data was compiled by Ipsos on behalf of MNP LTD between December 1-7, 2021. 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 some of the national data is available by request.