MNP Consumer Debt Index Holds Steady Following Two Interest Rate Pauses, as Canadians Brace for Ongoing Economic Uncertainty

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“There are some persistent fears around interest rates,” says Bazian. “For 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.”

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As Canadians look to the future, one-third (33%, +3pts) expect their debt situation to improve one year from now, and a larger proportion (40%, +1pt) believe it will improve in five years. However, 13% say they expect their debt to worsen over both horizons. Fewer this quarter believe they will be able to cover all living expenses in the next year without needing more debt (54%, -4pts).

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Glimmers of Financial Resilience Emerge

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Amid economic uncertainty, there are signs that some Canadians are beginning to regain a modest sense of financial control. The average amount households have left at month-end has increased to $916, up $49 from last quarter–marking the second-highest amount recorded since tracking began in 2017, potentially signalling that more Canadians are building a financial buffer in case of further economic disruption.

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Increases were most pronounced among older Canadians aged 55 and over (+$84) and those in middle to higher-income households. Households earning $60K to under $100K reported the most significant jump (+$260), followed by those earning $100K or more ($129).

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Canadians’ net personal debt rating (positive subtract negative) held relatively steady at 21 points (-1pt), maintaining gains made earlier this year after rebounding from a record low of eight points in December 2024.

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“These are small but encouraging signs that some households may be regaining a bit of financial footing,” says Bazian. “While challenges remain, any movement toward greater stability is meaningful in this environment.”

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Millions Remain Close to Insolvency

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However, while some households are managing to set a little more aside, a significant proportion of Canadians remain on precarious financial footing.

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“About 14 million Canadians say they are close to financial insolvency, with little to no room to absorb an unexpected expense or income disruption,” says Bazian.

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Two in five Canadians (42%, -1pt) report they are $200 or less away from financial insolvency each month. That includes more than a quarter (27%, +1pt) who say they already don’t make enough to cover their bills and debt payments.

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Bazian urges those feeling overwhelmed by debt or financial pressure to speak with a Licensed Insolvency Trustee–Canada’s only federally regulated debt professionals who can provide unbiased advice on the full range of debt relief options available and administer solutions including consumer proposals and bankruptcies.

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“Whether you’re missing payments, dealing with collection calls, or just unsure how to get back on track, Licensed Insolvency Trustees can help you understand your options,” says Bazian. “These professionals are there to help you understand your financial position and explore all your options in a judgment-free environment.”

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This quarter, nearly half of Canadians (46%) say they regret the amount of debt they have taken on, increasing three points, and two in five (44%, +2pts) are concerned about their current debt level.

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Bazian says if financial stress is causing sleepless nights, it’s a sure sign it’s time to ask for help. “Many people are facing the same struggles right now. Just reaching out–even to better understand your options–can lift a huge weight off your shoulders. Getting advice early can make all the difference.”