Debt Literacy Month: Nearly Half (47%) of Canadians Regret Their Debt as Persistent ‘Debt Blind Spots’ Leave Many Financially Vulnerable

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Against this backdrop, MNP is marking Debt Literacy Month this March with a focus on ‘debt blind spots,’ helping Canadians better understand where their financial vulnerabilities lie, how quickly circumstances can change, and why planning for life’s ‘what ifs’ matters.

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“Financial shocks are often what push people into debt, or deepen existing debt, and debt literacy is what helps Canadians recognize the warning signs early, understand the trade-offs of relying on credit, and know their options before a situation escalates,” says Bazian.

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Five years on: persistent debt blind spots, ongoing challenges in household preparedness for sudden financial shocks

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Compared with five years ago, Canadians report feeling less equipped to handle unexpected life events, as unresolved debt blind spots leave households more vulnerable when unexpected income loss or expenses arise. The most recent data shows that Canadians recorded negative confidence scores (those who are confident minus those who are not confident) for every unexpected life event tested — and those scores have all worsened since 2020, underscoring that many of the same risk-readiness blind spots persist today.

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Source: Ipsos on behalf of MNP LTD

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Caption: In a side-by-side comparison of 2020 and 2025, Canadians’ net confidence in coping financially with unexpected life events is lower across all categories, and all measures now fall in negative territory.

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Unexpected financial shocks such as education costs (-13%, -5 pts 2025 vs. 2020), job loss (-8%, -4 pts 2025 vs. 2020), death of an immediate family member (-8%, -1 pt 2025 vs. 2020), and an illness preventing work for at least three months (-7%, -8 pts 2025 vs. 2020) showed the greatest vulnerability. Relationship changes such as divorce or separation (-1%, -5 pts 2025 vs. 2020) and unexpected auto repairs or vehicle purchase (-2%, -8 pts 2025 vs. 2020) also remained in negative territory, though to a lesser degree.

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Source: Ipsos on behalf of MNP LTD

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Caption: Starting in 2022, Canadians’ confidence in handling unexpected life events exhibits greater quarter-to-quarter fluctuation, reflecting a period of economic adjustment, and in 2024–2025, the measures remain firmly in negative territory, underscoring that many Canadians report low confidence in their ability to cope with major financial shocks.

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Taken together, the findings suggest that while Canadians recognize these risks in theory, many have low confidence in their ability to absorb them in practice, particularly in today’s higher-cost environment.

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“Sudden changes in circumstances can strain household finances quickly, particularly for individuals who are already relying on credit to manage everyday expenses,” explains Bazian. “The most common triggers that push people into unmanageable debt are relationship breakdowns and job loss or reduced income. Seeking qualified advice early can help individuals understand their options and make informed decisions before financial pressures escalate.”

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Debt literacy gaps compound financial risk

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Gaps in debt literacy, such as how interest rate increases impact personal finances, can compound financial risk over time. In turn, this can make it harder to stay prepared for life’s ‘what ifs.’ When people underestimate how quickly interest adds to their balances, a sudden life shock can turn manageable debt into something far more difficult to handle.