\u201cCanadians have not witnessed such economic uncertainty since the pandemic,” said Grant Bazian, president of insolvency firm MNP. (Photo by Artur Widak\/NurPhoto via Getty Images) \u00b7 NurPhoto via Getty Images <\/p>\n
Following two consecutive interest rate pauses by the Bank of Canada (BoC), Canadians continue to feel financial pressure, with many stuck delaying major life goals amid ongoing economic uncertainty, according to the latest MNP Consumer Debt Index released Monday.<\/p>\n
Nearly two-thirds of Canadians (64 per cent) say they desperately need interest rates to fall, given the financial constraints they\u2019re under. Over one-third (36 percent) report feeling anxious or stressed about their financial situation, while one-quarter say they\u2019ve had to stall life plans (26 per cent) or are constantly putting out financial fires due to an endless stream of unexpected costs (24 per cent).<\/p>\n
Younger adults and lower-income households are the most likely to report financial strain and feeling stalled, the survey found.<\/p>\n
\u201cCanadians have not witnessed such economic uncertainty since the pandemic. We see some stability in financial perception, but many households feel like their lives are on hold, stuck in a financial holding pattern as they wait for the proverbial dust to settle,\u201d said Grant Bazian, president of insolvency firm MNP, in a statement.<\/p>\n
\u201cGiven the persistent economic pressures and backdrop of global volatility, many are hesitant to make major financial or life decisions, unsure of what lies ahead.\u201d<\/p>\n
In response to mounting financial pressures, 41 per cent of Canadians have reduced discretionary spending, 33 per cent are increasing savings or building emergency funds, and 27 per cent are prioritizing debt repayment. Nearly one-quarter (23 per cent) are putting life goals on hold, such as buying a home, starting a family or changing careers. Canadians aged 18 to 34 are most likely to postpone these milestones.<\/p>\n
Over one-third of Canadians (41 per cent) fear that rising interest rates could drive them towards bankruptcy. And, even if rates were to decline, 45 per cent of Canadians remain concerned about their ability to repay debt.<\/p>\n
According to Bazian, approximately 14 million Canadians say they are close to insolvency.<\/p>\n
\u201cThere are some persistent fears around interest rates,\u201d he said. \u201cFor some households, the damage has already been done. After years of rising costs, high interest rates and depleted savings, there may be some deep anxieties about what could still be to come.\u201d<\/p>\n