Half of Canadians are $200 or less away from no longer being able to pay their monthly bills and debts, according to MNP’s quarterly report on consumer debt.
• Also read: How to get rid of a credit card balance
• Also read: Nearly $2 million lost in the Quebec ketchup adventure
“Despite the drop in interest rates, people are still worried,” said Grant Bazian, president of the insolvency firm MNP, which specializes in consumer proposals and debt consolidation.
According to Bazian, people’s perception of their financial situation is generally based on what affects them in the immediate future. “People react to what’s happening now rather than what will happen in the future.”
-Although economic indicators or changes in interest rates take a little time to show their effects in daily life, Bazian points out that they can also affect consumers’ perception of their financial situation.
The survey, conducted by Ipsos, found that fewer and fewer Canadians expect their debt situation to improve over the next year, while a growing number believe that ‘it’s going to get worse. More than half say they don’t think they can cover all of their living and family expenses over the next year without accumulating more debt.
MNP’s Consumer Debt Index, which measures Canadians’ attitudes toward their debts and their ability to pay their bills, fell to its second lowest level since it began tracking in 2017.
Meanwhile, Canadians’ personal debt rating has reached a historic low. A third of respondents reported being insolvent, with women more likely than men to be $200 or less from insolvency.
