Manitoba, Saskatchewan most pessimistic provinces about personal finances: report

Canadian currency is shown in this file photo.

WINNIPEG — Manitoba and Saskatchewan residents are more pessimistic about their personal finances compared to anywhere else in Canada, according to a new report.

The latest Consumer Debt Index, conducted by Ipsos on behalf of MNP LTD, found that nearly half of the respondents in the two provinces are worried about their current debt levels, with 55 per cent admitting they regret the amount of debt they’ve taken on.

Only 26 per cent of people said they expect their financial situations to improve one year from now, and 15 per cent said they expect it to get worse.

Gord Neudorf, a licensed insolvency trustee with MNP in Winnipeg, said in a news release he expects to see creditors trying to help people get caught up on their payments as the economy reopens.

“Those efforts might include increasing monthly payments or extended loan terms, which will just make the situation worse for those already struggling to cover their bills,” he said.

The survey found that 51 per cent of respondents in Manitoba and Saskatchewan reported they are $200 or less away from financial insolvency at the end of the month, which is the highest level among any of the provinces. MNP noted this proportion includes 30 per cent who are already insolvent and can’t pay their bills or debt payments.

“Many households are close to not being able to pay their monthly bills, so it wouldn’t take much to push them back into a tough spot financially,” Neudorf said.

“A loss in overtime pay or less than one unexpected car repair – just a few hundred dollars per month – is all it could take to put a family into financial distress.”

Manitoba and Saskatchewan residents also reported having little wiggle room leftover in their budgets each month.

The Consumer Debt Index determined that, on average, after they paid their bills and debt payments, people in Manitoba and Saskatchewan reported having $98 less leftover at the end of month compared to what they had in March.

Neudorf noted that this is not the case for residents in other parts of Canada, who have been spending less money on discretionary purchases amid the COVID-19 pandemic and reported an increase in funds leftover at the end of the month.

“Here, the marginal increases in groceries, utilities and online shopping, coupled with a loss in wages, have decreased the amount of wiggle room in household budgets,” Neudorf said.

As for whether Manitoba and Saskatchewan residents believe they can cover their expenses over the next year without going into debt, 61 per cent said they could.

Though, the survey found, 33 per cent of people in the two provinces rated their debt situation as excellent, the fewest of any of the provinces. They were also the least likely of any of the provinces to say their current debt situation was better than it was a year ago or five years ago.

“Considering most of the country is feeling a sense of optimism as a result of the pandemic relief measures, it is concerning that many Manitoba and Saskatchewan residents are far less optimistic about their personal debt situation right now,” Neudorf said.

“People who were having difficulties making ends meet before the pandemic are now seeing those financial problems intensify.”

MNP’s Consumer Debt Index looks at Canadians’ attitudes toward their debt, as well as their ability to pay their bills, take on unexpected expenses and absorb interest rate fluctuations without going into insolvency.

The latest survey was completed from June 1 to 2, when more than 2,000 Canadians over the age of 18 were polled.

The poll is accurate within plus-minus 2.5 percentage points, 19 times out of 20.