Canadian consumers are increasingly worried about their growing debt levels as inflation pressures household budgets, according to a new poll by business advisory firm MNP.
The MNP Consumer Debt Index, a quarterly survey of consumer sentiment, has declined to a new all-time low of 77.
The drop highlights Canadians’ growing concerns about their personal finances as interest rates continue to rise to dampen inflation that remains near 30-year highs in Canada.
The MNP poll found that nearly half (47%) of Canadians are concerned about their debt, a record high.
MNP also said that fewer people were confident in their ability to pay their current living expenses without going further into debt, and 68% said they are feeling the impacts of higher interest rates.
More people reported that their ability to absorb a one percentage point interest rate increase going forward had worsened. Three in five people (60%) said they are more concerned about their ability to pay their debts as interest rates continue to rise in 2023.
And just under half of respondents (45%) said they are $200 away from not being able to meet all their financial obligations.
Canadians with household incomes lower than $40,000 and people aged 18 to 54 were most likely to be negatively impacted by rising interest rates.
One in five people (20%) reported they would use savings to help pay their bills, and one in 10 (10%) said they would use credit cards or borrow money from friends and family to cover their expenses.
The MNP Consumer Debt Index was compiled by polling firm Ipsos between December 1 and 6, 2022. A sample of 2,000 Canadians aged 18 and over were interviewed for the poll
