A survey from insolvency firm MNP Ltd. indicates that Canadians’ personal finances have improved even as they’ve taken steps to cut their expenses amid economic turmoil. The MNP Consumer Debt Index rose nine points to 88 this quarter, with about three-quarters of respondents cutting back on spending or delaying major purchases due to uncertainty around U.S. tariffs and their potential impact on the global economy. The improvement in Canadians’ feelings towards their personal finances follows two Bank of Canada interest rate cuts this year.
Sixty percent of respondents are concerned about the possibility of interest rates increasing, but the proportion of those feeling better equipped to handle a one-percentage-point increase has risen by four points to 24%. Lower interest rates and budget adjustments provide some breathing room for Canadians. More than half of respondents worry about falling into financial trouble if rates rise, with 38% saying an increase could push them toward bankruptcy.
The MNP survey suggests 44% of Canadians are bracing for an increase in housing costs within the next year, with renters more likely to be affected. More than four million mortgages, roughly 60% of all outstanding mortgages in Canada, are set to renew by the end of 2026 at potentially higher rates.
Source: The Star
