If you’re feeling like it is hard to keep out of debt, you’re not alone.
The number of Canadians who are $200 or less away from financial insolvency is up to 46% — a jump of 6% since September 2018 — according to the latest survey by MNP Ltd.
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The survey also indicated that three-in-10 (31%) Canadians feel that they don’t make enough to cover their bills and debt payments, which is an increase of 7% over the same time frame.
Grant Bazian, President of MNP, said “our research continues to highlight the fact that many Canadians don’t have enough in the budget to make ends meet, let alone address their underlying indebtedness.”
MNP found in the survey that, with the exception of Atlantic Canadians, insolvency concerns rose across the country. Below is a breakdown of the proportion of residents, by region, that said they are within $200 or less of financial insolvency:
- 56% – Saskatchewan and Manitoba (+8%)
- 48% – Alberta (+8%)
- 46% – Ontario and Quebec (+6%)
- 45% – Atlantic Canada (-4%)
- 41% – British Columbia (+6%)
Another alarming result from the survey reveals that 45% of Canadians say they will not be able to cover all living and family expenses in the next year without going further in debt.
Bazian points to higher interest rates combined with household expenses being the biggest cause for Canadians not being able to make significant debt reductions.
Since the previous MNP insolvency survey in September, the number of Canadians who say they are feeling the effects of interest rate increases has jumped to 51% (up 6%) and half of Canadians feel they will be in financial trouble if rates continue to rise (up 5%).
Rate hikes have also resulted in a growing concern from Canadians in their ability to repay debts.
“Many have so little wiggle room that any increase in living costs or interest payments can tip them over the edge. That’s what we are seeing happen right now,” said Bazian.
Ipsos, which conducts the quarterly poll for MNP, surveyed 2,154 Canadians online from Dec. 7 to Dec. 12.