More than half of British Columbians say they are already feeling the effects of interest rate increases, a six-point jump since December

British Columbians experienced the largest decrease in disposable income among the provinces since last quarter

VANCOUVER, BC – April 18, 2022 – British Columbians are feeling the enduring financial impacts of COVID-19 as well as the pressure of increased interest rates and a rising cost of living, according to the latest MNP Consumer Debt Index, which is conducted quarterly by Ipsos on behalf of MNP LTD.

More than half (53%) of British Columbians say they’re already feeling the effects of interest rate increases, jumping a significant six points since December. With more rate hikes on the horizon, a growing number of British Columbians say they’re more concerned about their ability to pay their debts (60%, +3pts), and don’t believe they can cover all living / family expenses in the coming year without going further into debt (50%, +4pts). One in three (35%, +1pt) say rising rates could drive them closer to Bankruptcy.

“The affordability crisis driven by rising interest rates and a higher cost of living is already having an impact on British Columbians,” says Linda Paul, a Licensed Insolvency Trustee with MNP LTD in the Lower Mainland. “Household budgets are contracting and at some point it’s going to become impossible for some households to cover their monthly living expenses and debt repayment obligations — particularly those who are already in the red.”

British Columbians have experienced the largest decrease in disposable income across the country, down $269 to $734 after having the most disposable income last quarter. In addition, nearly half (46%, +1pt) report they are $200 away or less from not being able to meet all of their financial obligations. This includes 34 percent (+4pts) who say they already don’t make enough to cover their bills and debt payments.

“Those who depleted their rainy-day savings funds over the last two years may feel forced to rack up more debt to keep up with rising costs,” explains Paul. “But as interest rates rise, so will the cost of servicing some of those debts, making it more difficult to pay them down. It can be really hard to break free from that cycle of debt once it begins.”

Yet, while British Columbians are feeling their budgets tighten, they are the least likely to say they’re concerned about the impact of rising interest rates on their financial situation (53%, -8pts) compared to the other provinces.

They’re also the least likely to say they’re not financially prepared to deal with a rate increase of one percentage point (16%, -9pts), be concerned about their current level of debt (36%, -6pts), or regret the amount of debt they’ve taken on in life (40%, -7pts).

“Although it has dropped significantly, British Columbians still have a higher amount of disposable income than most provinces, which could explain why they’re feeling less concerned about their future finances,” says Paul.

“However, if this initial drop is any indication, British Columbians’ finances are likely to be further impacted as costs and interest rates continue to rise this year. Some will be unable to meet their debt repayment obligations, making them insolvent.”

Licensed Insolvency Trustees are the only professionals that can offer deeply indebted individuals with debt-relief options, including Consumer Proposals and Bankruptcy.

“People often experience feelings of shame and regret about their debt situation. The burden of excessive debt can lead to stress and anxiety. As a result, many convince themselves of things that simply aren’t true: they’re alone, they’re a failure, they can never get out of debt, or they’re beyond help,” explains Paul.

“My advice to anyone struggling is don’t be too hard on yourself. We’ve all been through a lot over the last two years, including a financially devastating pandemic and related job loss. Seek professional debt advice right away.”

Paul notes that while many people fear they will lose their house or car through a Bankruptcy, there are alternatives that can help them overcome their debt and protect assets in the process. By filing a Consumer Proposal, for example, an individual can hold onto their assets and repay their debt through interest free payments that fit their budget.

Both Bankruptcy and Consumer Proposals also offer legal protections that stop wage garnishments and end harassing phone calls from creditors.

“If you’re in or nearing a situation where you need to use credit cards and other debt to cover your bills, now is the time to speak with a government licensed professional who can give you unbiased advice about all of your debt-relief options,” says Paul.

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 who are struggling with an overwhelming amount of debt each year. 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 twentieth wave, the Index has dropped one point since last quarter to 87 points, remaining at an all-time low since its inception in June 2017. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between March 9 to March 15, 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.

A summary of some of the national data is available by request.