Debt worry as higher interest rates and rising cost of living take their toll: MNP

A report from insolvency firm MNP Ltd. says 52 percent of Canadians say they are $200 or less away from not being able to pay all their bills at the end of the month as higher interest rates and rising costs of living have put a strain on their budgets.

The result for the July report is six percentage points higher than the 46 percent in April.

MNP President Grant Bazian says the rising burden of household bills and food prices has added to Canadians’ financial anxiety and is exacerbated by higher levels of debt, especially for those deeply indebted.

MNP’s consumer debt index fell to 83 points in its latest reading from 89 points in April, as Canadians took a more negative stance on their personal finances and debt.

The report says 35 percent of those surveyed say they already don’t earn enough to pay their bills and debts, up from 30 percent in April and a record high for the survey. It also says a record 48 percent of those surveyed are concerned about their current debt levels.

Household debt has been identified as a key risk to the economy by the Bank of Canada, which is expected to make its next interest rate decision on Wednesday.