Manitoba and Saskatchewan residents’ debt concerns spike amid persistently high interest rates, inflation and affordability struggles, MNP Consumer Debt Index finds

• More than half say they regret the amount of debt they’ve taken on in life (57%) — up a record 19 points from last quarter, reaching a record high.
• Half say they’re concerned about their current level of debt (50% +9 pts).
• Seven in 10 say they’re already feeling the effects of interest rate increases (74%, +15 pts), more than any other province.
• Seven in 10 say they are more concerned about their ability to pay their debts as interest rates rise (72%, +12 pts).
• Three in five say they’ll be in financial trouble if interest rates go up much more (61%, +14 pts).

WINNIPEG, MB, January 16, 2023 – Manitoba and Saskatchewan residents’ anxiety about their debt situation is building, amid rising interest rates, persistent inflation, and heightened affordability concerns. The latest MNP Consumer Debt Index finds a record 57 percent of Manitoba and Saskatchewan residents regret the amount of debt they’ve taken on in life, increasing 19 points from the previous quarter — the largest increase since tracking began. Additionally, half (50%) say they’re concerned about their current level of debt, jumping a significant nine points.

The MNP Consumer Debt Index is conducted quarterly by Ipsos to track Canadians’ attitudes about their debt situations and their ability to meet their monthly payment obligations. It has taken a drastic plunge to 77 points, down a record 15 points from last quarter, marking an all-time low since the Index was created more than five years ago.

“This massive spike in Manitoba and Saskatchewan residents’ attitudes towards their personal debt situation is a reflection of this past year’s persistent inflation and swift interest rate hikes,” says Tanya Reynolds, a Licensed Insolvency Trustee with MNP LTD in Winnipeg. “Many households are experiencing a double whammy. On one side, inflation is eroding their household budget. On the other side, those who are overleveraged face soaring borrowing costs.”

After last year’s seven interest rate increases, Manitoba and Saskatchewan residents are feeling significantly worse about their ability to absorb any more. Compared to the other provinces, Manitoba and Saskatchewan residents are the most likely to say they are already feeling the effects of interest rate increases (74%) — a massive 15-point jump since last quarter. Seven in 10 say they’re more concerned about their ability to pay their debts as interest rates rise (72%, +12 pts) while three in five say they will be in financial trouble if interest rates go up much more (61%, +14 pts); both rising sharply from the previous quarter. A quarter of respondents say their ability to absorb an interest rate increase of one percentage point has worsened (26%, +3 pts).

Manitoba and Saskatchewan residents are experiencing rising costs more acutely than the rest of the provinces. They are the most likely to report that feeding themselves and their family (65%, +13 pts), putting money aside for savings (64%, +17 pts), and transportation (66%, +26 pts) are less affordable. More also say clothing or other household necessities (51%, +12 pts) and housing (40%, +9 pts) are becoming less affordable. Across the board, Manitoba and Saskatchewan saw the largest quarterly increases compared to any other province.

“Households may find it difficult to accommodate an increase to expenses and debt carrying costs if they already have little wiggle room and are spending nearly all their paycheque each month. Those households are struggling to sustain their standard of living, and often they resort to taking on more debt as a result,” explains Reynolds.

More Manitoba and Saskatchewan residents are already resorting to taking on more debt or reducing their debt payments to make ends meet. Compared to December 2021, significantly more say they’ve paid only the minimum balance on their credit card (34%). Up 10 points, this is the largest increase among the provinces. Manitoba and Saskatchewan residents are also the most likely to say they paid the minimum balance on their line of credit (23%, +9 pts) or that they will use their savings to pay their bills (26%, +7 pts). More now say they will borrow from friends or family (13%, +6 pts). One in five have borrowed money they can’t afford to pay back quickly (21%, +1 point). One in 10 say they will use their credit card to pay their bills (12%, -4 pts). And two in five say they plan on reducing their discretionary spending to make ends meet (39%), increasing four points since last quarter.

“More Manitoba and Saskatchewan residents are being pushed to make difficult financial decisions to try to keep up. Amassing more debt can have lasting financial impacts, though, and can push some into a debt spiral. Financial struggles like these can often bring on stress and anxiety which can significantly affect a person’s mental health,” says Reynolds.

Although down slightly since last quarter, nearly half (45%, -3 pts) of Manitoba and Saskatchewan residents report that they are $200 away or less from not being able to meet all of their financial obligations at month’s end. That includes three in 10 (28%, -6 pts) who already don’t make enough to cover their bills and debt obligations. Only half are confident in their ability to cover all of their living/family expenses in the next year without going further into debt (51%, -1 point).

“Manitoba residents should be mindful of the financial red flags as the holiday bills arrive this month. These may signal that professional debt advice is needed,” says Reynolds. “Seek help from a debt professional like a Licensed Insolvency Trustee if you experience any red flags such as being unable to cover your bills or anticipate missed payments, or you plan to use other forms of credit to pay your bills.”

Debt-relief options can include striking a deal with creditors through an informal debt settlement, consolidating all debts into one monthly payment, making a debt repayment plan through a Consumer Proposal, or declaring Bankruptcy.

Reynolds explains that individuals often miss the initial warning signs or feel shameful about seeking help, causing the debt to snowball. That often does little to address the debt and leaves the individual with fewer options moving forward.

“Each person’s debt situation is unique, which is why meeting with a Licensed Insolvency Trustee for a free, confidential financial review is the best place to start. They will walk through all of the debt relief options available and offer an expert opinion on which would provide the most permanent and cost-effective solution,” advises Reynolds.

Licensed Insolvency Trustees are federal-regulated and are the only debt professionals in Canada who are qualified to advise on all the debt relief options available. MNP offers free consultations across Canada.

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-third wave, the Index has plunged 15 points since last quarter to 77 points, an all-time low since the MNP Consumer Debt Index’s inception over five years ago. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between December 1 and December 6, 2022. 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.