Consumer confidence reaches crisis levels as household finances increase

According to a new consumer debt index report, inflation and rising interest rates are putting an enormous strain on Atlantic Canadians.

“Many households have to take on additional debt to be able to service existing debt,” said MNP Insolvency Trustee Tina Powell, who added, as interest rates continue to rise, the cost to service household debt will soon increase as well.

“Which will result in a cycle of debt that is near impossible for people to get out of.”

The consumer index report by MNP, an accounting and business advisory firm in Canada, is broad in its scope and focuses on a multitude of concerns for Atlantic Canadians currently.

In its data collected for Atlantic Canada, MNP found that:

• 57 per cent of Atlantic Canadians say they are beginning to feel the effects of interest rate increases
• 64 per cent say rising interest rates hurt their financial situation
• 43 per cent say rising interest rates could push them closer to bankruptcy
• 60 per cent say they are $200 away (or less) from not being able to meet their financial obligations

“Everyone is still shackled by what they have in the checking account,” said Halifax resident Alex Perry, who also said he does see a positive pathway forward.

“I am confident that this is a good labour market and that there would be an ample spot for giving government spending support to get out of this crisis.”

Perry also said the pandemic might not be the best time to measure consumer confidence.

“It is still a hard time for us all and until everything starts opening back up again,” said Perry. “But the sun is coming out and people are willing to resume with their lives post-COVID.”

According to the report by MNP, while many households in Atlantic Canada are struggling financially, the overall situation is not much better outside of the region.