A new report from insolvency firm MNP LTD. says more Canadians are facing a deteriorating debt situation, as high costs and elevated interest rates make it harder to pay the bills.

The latest MNP Consumer Debt Index shows 51 per cent of Canadians are $200 or less away from not being able to complete their financial obligations, while the average amount of money left over after paying the bills has fallen to $674 this quarter.

“There is no mystery as to what is causing Canadians’ bleak debt outlook: it’s getting increasingly difficult to make ends meet,” Grant Bazian, president of MNP LTD, said in a news release.

“Facing a combination of rising debt carrying costs, living expenses and concern over the potential for continued interest rate and price hikes, many Canadians are stretched uncomfortably close to broke.”  

The report shows Canadians are the most pessimistic about their financial situation than they’ve been in the five-year history of the survey. Twenty per cent of respondents indicated their finances are “much worse” than a year ago, while 25 per cent found their debt had worsened compared to five years ago, and 16 per cent of respondents expected their debt will further worsen in five years.

That gloomy consumer debt sentiment was also reflected in a recent report from Equifax Canada, which last month reported that credit card balances hit an all-time high of $107.4 billion as total Canadian consumer debt reached $2.4 trillion.

While most economists expect the Bank of Canada will hold interest rates steady at next week’s announcement, the MNP report shows Canadians are increasingly concerned about their ability to absorb further increases.

MNP’s survey found 28 per cent of respondents said their ability to pay a one-percentage-point rate increase worsened since the last quarter, while 37 per cent of respondents said they could not afford to pay $130 more in interest payments on debt.

Despite debt worries, MNP reported that Canadians feel slightly better about their ability to pay their debts and fewer feel they are being driven to bankruptcy.

“For now, the financial concerns of some Canadians have been offset, at least to some degree, by the strong job market,” Bazian said. “The uncomfortable truth is that higher interest rates slowing the economy will inevitably come with consequences like increased unemployment.”

Bazian suggested anyone struggling to pay the bills and manage their debt should contact their lender to look for solutions or reach out for expert help.


The data was compiled by Ipsos on behalf of MNP LTD between September 5-8, 2023. For this survey, a sample of 2,000 Canadians aged 18 years and over was interviewed. Weighting was then employed to balance demographics to ensure that the sample's composition reflects that of the adult population according to Census data and to provide results intended to approximate the sample universe. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled. The credibility interval will be wider among subsets of the population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.

With files from The Canadian Press