Canadians are battening down the hatches heading into the new year, with six in 10 expecting the overall economy to worsen in 2026, a survey by consumer insolvency firm MNP Ltd. shows.
Almost three in four (71 per cent) of Canadians expect higher living costs and 59 per cent said they expect the overall economy to worsen, the MNP Consumer Debt Index released on Monday said.
The survey, conducted by Ipsos for MNP Ltd. between Nov. 28 and Dec. 1, reached out to 2,001 Canadians over the age of 18.
Another 59 per cent said they expect rising housing pressure and more than half (54 per cent) said higher interest rates and inflation are likely to add financial strain on their finances.
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The new year also brings anxiety around the job market for more than half (52 per cent) of Canadians, while nearly two-thirds (62 per cent) said rising poverty and inequality were major concerns.
Many are expecting their household budgets to be strained in the new year, with the majority anticipating higher taxes (53 per cent), and approximately half of Canadians expecting transportation (50 per cent) and health-care costs (48 per cent) to worsen.
However, the picture is not all bleak, as “financial breathing room has improved for some Canadians, enabling them to make adjustments and seek solutions,” MNP president Grant Bazian said.
Two in five Canadians (41 per cent) report being $200 or less away from financial insolvency each month. This is down seven per cent from last quarter, the report said, adding that it is at the lowest-levels measured in the post-pandemic period.
The average amount Canadians have left at the end of the month has risen to $907, up by $163 since last quarter, the report added.
However, less than half of Canadians (47 per cent) report having six months of emergency savings.
Six in 10 Canadians (59 per cent) said they are taking proactive steps such as adjusting household budgets (43 per cent), consolidating debt (12 per cent) or seeking help from a financial professional (11 per cent).
The survey said 12 per cent of respondents say they are avoiding thinking about their finances, while 15 per cent said they avoid discussing finances with family or professionals.
Nearly one in five (17 per cent) Canadians are now relying on credit to cover essential expenses, the survey found.
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