Ontarians on the economy: Half say the worst is yet to come

About two in five Ontarians feel that the economic conditions over the last six months were worse than expected, more than any other province.

• Half believe the worst part of the economic cycle is yet to come (49%).
• About two in five feel that economic conditions over the last six months were worse than they expected (37%), more than any other province.
• Half are concerned about their current level of debt (49%, -1pt).
• Three in five (61%, -4pts) are concerned about the impact of rising interest rates on their financial situation.
• Nearly half (48%, unchanged) report that they are $200 away or less from not being able to meet all of their financial obligations at month’s end, including three in 10 (30%, -3pts) who are already insolvent.

TORONTO, ON – April 11, 2023 – Personal finances continue to be a major source of stress for Ontarians. Half anticipate that the situation will continue to deteriorate, according to the latest MNP Consumer Debt Index conducted quarterly by Ipsos. When asked about the impact of Canada’s current economic conditions on their personal finances, half (49%) of Ontarians say they believe the worst is yet to come. Ontarians are more likely than any other province (38%) to feel that we are currently experiencing the worst part of the economic cycle. Only 13 percent are optimistic enough to say the worst is behind us.

“Deeply indebted Ontarians may have reason to believe that the worst is yet to come given the impacts of inflation and the higher interest rates on their debts,” says Caryl Newbery-Mitchell, a Licensed Insolvency Trustee with MNP LTD in Toronto. “Many households don’t have any wiggle-room in their budgets, which underscores the toll higher interest rates are taking — especially on those who are the least capable of affording it.”

Compared to the other provinces, Ontarians are the most likely (37%) to feel that the economic conditions over the last six months were worse than they expected. Nearly half (48%, unchanged) report that they are $200 away or less from not being able to meet all of their financial obligations at month’s end, including three in 10 (30%, -3pts) who already don’t make enough to cover their bills and debt payments. While the number of insolvent Ontarians has declined slightly, disposable income at the end of the month has dropped to $805, down $40 from the previous quarter. Three in five (61%, -4pts) say they’re concerned about the impact of rising interest rates on their financial situation.

Newbery-Mitchell notes that Ontarians are feeling some reprieve with interest rates stabilizing after last year’s successive increases. Fewer are worried about their ability to pay their debts as interest rates rise, although six in 10 (62%, -6pts) are still concerned. More than half are confident they can cover all living / family expenses in the next year without going further into debt (54%, +5pts). Significantly fewer Ontarians (55%, -9pts) say they will be in financial trouble if interest rates go up much more. Still, about half are worried about their current level of debt (49%, -1pt), and the majority of Ontarians continue to be more careful with how they spend their money (82%, -5pts).

"The results indicate a relatively optimistic financial outlook among Ontarians, but concern remains elevated — likely a reflection of the unease many still feel regarding interest rates and inflation. Many lower-income Ontarians will struggle to find a financial comfort zone without outside help," Newbery-Mitchell explains.

“I advise Ontarians to take a proactive approach to their debt management whether they’re anticipating the worst or hoping for the best,” says Newbery-Mitchell. “Monitoring your budget is critical. As is establishing an emergency fund for unexpected expenses like car repairs or higher debt servicing costs. Consider depositing any tax refunds into your emergency fund or using it to reduce your debt.”

Newbery-Mitchell advises Ontarians who are struggling to pay their bills to seek professional help right away. That will help them avoid a cycle of increasing debt and interest payments which often lead to longer-term financial hardship.

“Individuals are often hesitant to consider Bankruptcy because of its negative connotations and delay seeking help with their debt as a result. This only prolongs the financial distress and can cause more serious issues down the road like harassing phone calls from collection agencies and wage garnishments,” she says.

Licensed Insolvency Trustees are the only debt-relief professionals who can offer unbiased, customized advice about all of the debt-relief options, including informal debt settlement, Consumer Proposals and Bankruptcy. They can stop or prevent collection calls and wage garnishments, as well as offer legal protection from creditor actions. MNP offers Free Confidential Consultations with Licensed Insolvency Trustees 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 have been working with individuals to help them recover from times of financial distress and regain control of their finances. With more than 240 Canadian 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-fourth wave, the Index has rebounded to 89 points, up 12 points from the all-time low recorded last quarter. Visit MNPdebt.ca/CDI to learn more.

The data was compiled by Ipsos on behalf of MNP LTD between March 7 and March 14, 2023. For this survey, a sample of 2,004 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.