Manitoba and Saskatchewan feeling the strain of inflation, increased cost of living

• Two-thirds feel their weekly spending on essentials has increased by at least $100 compared to a year ago (68%).
• Nearly half regret the amount of debt they’ve taken on in life (47%, +3pts).
• Three in five say they’re more concerned about their ability to pay their debts as interest rates rise (61%, +1pt).
• Nearly half report that they are $200 away or less from not being able to meet all their financial obligations (49%, +4pts).

WINNIPEG, MB – July 10, 2023 – Amid rising interest rates and a challenging cost of living households, the proportion of Manitoba and Saskatchewan residents who report being close to insolvency has crept up since last quarter, according to the latest MNP Consumer Debt Index. Nearly half (49%) of Manitoba and Saskatchewan residents report that they are $200 away or less from not being able to meet all their financial obligations, increasing four points from last quarter. This includes more than a quarter (27%, -2pts) who already don’t make enough to cover their bills and debt payments, making them insolvent.

“More Manitoba and Saskatchewan residents are finding themselves close to insolvency this quarter,” says Tanya Reynolds, a Licensed Insolvency Trustee with MNP LTD in Winnipeg. “The growing burden of household bills and food prices has intensified the financial anxiety for some Manitobans. The added challenge of higher debt-servicing costs further compounds the situation — especially for those with a heavy debt load.”

As high borrowing costs persist, more Manitoba and Saskatchewan residents feel pessimistic about their consumer debt; nearly half (47%) regret the amount of debt they’ve taken on in life, a three-point increase since last quarter. Yet while they regret the debt they’ve accumulated, only a third (35%) are concerned about their current level of debt, down nine points from last quarter.

“The discrepancy highlights that some individuals may not fully grasp how higher borrowing costs affect their debt management and long-term financial stability. Households are facing myriad financial pressures with the dramatic increase in the cost of living. With nearly half of the population having little wiggle room in their budgets, many could be at risk of falling into arrears on payments. Late fees and interest can accrue quickly when bills like credit cards go past due. That can make it even more difficult to catch up on payments,” says Reynolds.

Three in five Manitoba and Saskatchewan residents still say they’re feeling the effects of interest rate increases (60%), although this has dropped five points since last quarter. About three in five are also concerned about their ability to pay their debts as interest rates rise (61%, +1pt). Half (51%) say they will be in financial trouble if interest rates go up much further, down four points. Yet, despite fewer voicing concerns surrounding interest rates, more Manitoba and Saskatchewan residents (87%, +5pts) say they will be careful with how they spend their money.

While some have tried to spend more cautiously, the average Manitoba and Saskatchewan resident says they’re spending an additional $227 per week on essential items compared to a year ago. Likely the result of inflation, two-thirds of Manitoba and Saskatchewan residents (68%) feel their weekly spending on essentials has increased by at least $100. A quarter (26%) feel it has increased by between $100 and $200.

“Households are curbing their discretionary expenses and adopting a cautious spending approach; however, some have reached a point where it’s not possible to cut back any further. After switching to cheaper items at the grocery store and reducing their entertainment costs, they’re still struggling to pay for essential expenses like food for the table and their mortgage or rent,” explains Reynolds. “Many individuals will have to make difficult choices around which bills they can pay, and which they may have to postpone or forgo altogether.”

Reynolds recommends those who anticipate missing payments first contact their lender to see if they can set up a payment plan that fits within their means.

“Missing payments without prior communication with lenders is a warning sign that a borrower needs help,” says Reynolds. “Apart from directly contacting their lenders, individuals who are unable to manage their debts can seek professional help from a Licensed Insolvency Trustee. Through a confidential financial evaluation, they can provide unbiased advice on a range of debt relief options such as budgeting, debt consolidation, and others depending on the circumstances.”

Licensed Insolvency Trustees are the only federally regulated debt professionals who can assist with all the debt relief options, including Consumer Proposals and Bankruptcy, which can discharge people from debt. To support those in need of financial assistance, MNP provides free consultations across the country.

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 has 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-fifth wave, the Index has declined significantly to 83 points, down six points since last quarter. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between June 1 and June 6, 2023. 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.

National data is available upon request.