More and more Canadians say that they are right on the edge of financial insolvency, according to a study released by MNP Ltd. on Monday.
The number of Canadians who are $200 or less away from being in debt jumped a massive 6% in just five months, bringing it to a total of 46% – and that’s just one of the worrying statistics revealed by the survey.
“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,” said Grant Bazian, President of MNP Ltd. in a release.
The study found that roughly 1 in 3 Canadians (31%) did not make enough to cover their bills and debt obligations, a rise of 7% since September 2018.
Meanwhile nearly half of the country (45%) said they would not be able to cover all living and family expenses in the next year without going into further debt.
Moreover, only a minority 3-in-10 Canadians said they were confident in their ability to cope financially if an unexpected life-changing event were to occur.
Another major concern
According to MNP Ltd., the majority of Canadians are also worried about rising interest rates.
“Higher interest rates combined with household expenses that outweigh income mean that some are unable to make any kind of meaningful reduction in their debt and, in fact, continue to take on more especially if they encounter unexpected expenses,” added Bazian.
51% of survey respondents said they were concerned about the impact of rising interest rates; a whopping 57% said they could be in financial trouble if rates continued to grow; and a significant 39% said that larger interest rates could push them towards bankruptcy.
“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.
Across the board, Canadians who were within $200 of financial insolvency rose since September 2018, save for Atlantic Canada.
Here is a breakdown of the proportion of these residents approaching insolvency, by region.
- Saskatchewan and Manitoba (56%) (+8%)
- Alberta (48%) (+8%)
- Ontario (46%) (+6%)
- Quebec (46%) (+5%)
- Atlantic Canada (45%) (-4%)
- British Columbia (41%) (+6%)
MNP Ltd’s survey collected responses from 2,154 people across Canada between December 7th – 12th, 2018.