A new report from MNP LTD’s Consumer Debt Index reveals that half of Canadians are $200 or less away from financial insolvency, highlighting growing economic anxiety despite recent interest rate cuts by the Bank of Canada.
The survey, released Monday, shows a significant increase in financial strain, with 50% of respondents struggling to meet monthly bills and debt obligations—an eight-point rise from the previous quarter.
Debt sentiment has plunged to its lowest level since the index’s inception in 2017, scoring just eight points compared to its historical average in the mid-20s. According to MNP President Grant Bazian, the December interest rate cut to 3.25% has yet to provide relief for many households, especially those dealing with higher mortgage renewals post-pandemic.
“The lag definitely weighs into the survey,” Bazian explained. “Rate cuts haven’t hit their pocketbooks yet.”
Holiday expenses and mounting economic pressures have exacerbated the situation, with 51% of respondents expecting to incur additional debt in 2025 to cover living expenses. Additionally, 41% expressed fear of losing their jobs, marking the highest level of employment anxiety recorded by the index.
Despite the grim outlook, Bazian remains cautiously optimistic, stating, “If the Bank of Canada continues with additional rate cuts, these changes should eventually improve the financial picture for many households.”
