Canadians are adjusting how they live as financial commitments are catching up even before their paycheque arrives in their bank account, the MNP Consumer Debt Index shows on Monday.
Sustained cost pressures mean that for many Canadians, a substantial chunk of their income is already spoken for before they receive their paycheque, polling conducted by Ipsos for insolvency firm MNP Ltd. shows.
Three in five Canadians (61 per cent) say at least half of their income is already committed to bills, debt payments, and regular expenses before it arrives, while around one-third (32 per cent) say most of their paycheque is already committed before it arrives.
For one in six (16 per cent) Canadians, however, the situation is more dire as they say all of their paycheque is spoken for or their expenses exceed their upcoming income payment.
These financial pressures are driving “lifestyle shrinkflation,” said Grant Bazian, president of MNP Ltd.
“Lifestyle shrinkflation is people just cutting back on not their necessities, but their luxury items, their wish list, their events, their travel, their holidays or their kids’ activities,” he said.
Almost two in five (37 per cent) say financial pressures are hindering their financial progress, while more than one in three (35 per cent) are cutting back on family and personal enrichment expenses, such as personal care, clothing and children’s activities.
Travel plans are also taking a hit with more than half (57 per cent) saying they are cutting back on travel.
Four in 10 (40 per cent) are also scaling back on attending events like concerts, festivals, sports, movies or other events while more than half (56 per cent) are cutting back on dining out.
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The “lifestyle shrinkflation” is also affecting people’s relationships, as 28 per cent are scaling back on gifts, weddings, birthdays or other celebrations and 21 per cent are hosting family and friends a lot less.
A slide in your lifestyle doesn’t have to be all or nothing, said Stacy Yanchuk Oleksy, CEO of Alberta-based not-for-profit credit counselling agency Money Mentors.
“Instead of heading to Europe, maybe you do a Canadian vacation. Or instead of doing a Canadian vacation, you do a staycation. You can see there are decisions that can keep allowing the consumer to shrink that cost,” she said.
It can also be a good idea to take stock of automatic payments set up on your credit card for things like streaming services and consider which services you are paying for but not using, she added.
“They (streaming companies) bet on consumers being lazy. If I’m subscribing, I have to physically go and unsubscribe myself. That’s a hassle. It takes time,” Oleksy said.
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The MNP Consumer Debt Index considers all kinds of credit-related consumer debt, from credit cards and lines of credit to payday loans and ‘Buy Now Pay Later’ services.
On Monday, the consumer debt index for the last financial quarter rose from 87 points to 91 points, which indicates that Canadians’ debt situation improved slightly.
“People generally are feeling a little better about their financial situation, but there’s still this lurking concern in the background that the paycheques are spoken for already,” Bazian said.
The use of Buy Now Lay Later services has more than doubled over the past year (109 per cent increase) as more Canadians turned to flexible payment costs to help manage grocery costs, data from Canadian fintech firm KOHO shows.
“The findings make it clear that grocery costs are rising faster than Canadians can adapt. People are changing where they shop, how often they go, and how often they pay and yet the spending keeps climbing,” said Faye Lucas, head of consumer trust at KOHO.
While seeing Canadians cut back on expensive lifestyle choices may seem concerning, it also indicates that Canadians are being smarter with their money so as to not compromise on necessities, Bazian said.
“They’re being proactive about it. You can actually interpret this as to be very positive that Canadians are getting it. They understand their financial situation and they’re making changes to accommodate for it,” he added.
Ben, PP stated talking about inflation with Canadians at the same time Trudeau wasn’t “even thinking about it”. Carney told us to judge him on the prices in the grocery store. I guess he failed that test.
Aaaaand Trudeau rode off into the sunset after ruining my life
Bahaha the idiot commenter says it’s PPs fault ? Jesus the ignorance of the elbows crew. Carney could be hitting you in the face and you’d blame the opposition….who have no power. Canada and many of its residents are just lost causes. Elbows up
We have been saying this for years, since before the pandemic. Companies have no loyalty to Canada or their Canadian employees, we need a government that will stop handing out cheques to the people who will immediately turn around and send that money overseas. We need a government that will invest in the people that make this country great, education, healthcare, good government jobs that put upward pressure on wages. Not more privatization, not more datacentres, and certainly not bailouts for the developers and grocery magnates that have been squeezing every last drop out of the consumer for the last several decades. Enough is enough.
you can thank the liberal/ndp federal crooks
When your paycheck doesn’t go as far as it did a year ago when it was already under incredible inflation pressures, then you know you are in deep trouble. There is only one way things can go and that is deeper into debt and possible bankruptcy thanks to Trudeau and now Carney’s incompetent mismanagement of the economy.
Canada is on a slow decline. Yes still better than lots of places, but she sure ain’t what she use to be. In 50 year Canada will be a shell of the great country it once was.
It is cheaper for me to fly and stay in Phoenix or Las Vegas than it would for me to go to Toronto or Montreal.
Ben , who is under a different name below, blames PP and the conservatives . I guess he forgot they are not the Govt currently. A desperate attempt to deflect from Carneys failures.
Heres a thought, Where is the traitor Jagmeet hiding
But but my elbows are up
Tell me why again that Alberta should not become independent considering we are sitting on a trillion dollars of oil that the Rest of Canada withers away in debt and inflation?
“Affordability is the best it’s been in over a decade.”
After reading this, it is glaringly obvious that the liberal governments under Trudeau and Carney could care less for Canadians. We are their sheep to be fleeced regularly. Anyone thinking Mark Carney is doing his utmost to make life more affordable for Canadians needs a frontal lobotomy. Maybe printing some more money we don’t have or giving another billion to Ukraine will help. Carney jet sets around the world eating foods most of us will never taste or see and he has little to show for it. He’s says things like Muslim values are Canadian values, Canadians will have to tighten their belts, the new world order, and a country that owes debt is not a bad thing. And not Carney is involved with a BC condo buyout that directly involves Brookfield. How can Canadians look at this man and say he isn’t corrupt?
The cow in the left will be eating less Big Macs for lunch. Canada is an unaffordable, sh*thole full of dirty Indian monkies
These journalist dint have a clue.. its actually more expensive to stay cation in canada. It cost me more to do a weekend in Halifax then a week in Florida
Well when people vote on clwns, they likely end up at a circus? Our government is spending like there is no end of income and sooner or later, we will have to pay it back. If they think we’re in trouble now….wait!
The blame lies squarely with Trump and his cheerleaders in the Poilievre conservative party who just badmouth Canada and aren’t supporting Team Canada in trade negotiations.
I love how Trump totally owns Carney and that Carney gets on his knees and kisses the ring. Canada doesn’t exist without the USA and Elbows Up is a total joke.
Yes people this is what you get after 11 years of liberal incompetence It’s not going to change until the L I b t a r d s who keep voting them in lose their jobs, homes and virtually everthing they worked
The New World Order. It’s a place where people have been brainwashed to think they are middle class because they have a house, when in fact they are the exact people the billionaires and business owners refer to as the proletariat. We are all wage slaves and salary monkeys.
why do people blame trump? he didnt stop all the industries from expanding he didnt put in the carbon tax, reconcilliation,tanker ban,enviro regs our gov did that. we are lost like a ship without a rudder just spending borrowed money so the gov can make an announcement. i know lets give another billion to uke that’ll solve the problem. i am old i feel for the children they will be debt slaves forever we deserve to suffer not them. sad
Carney spends $50k each flight for catering. Disgusting waste of money.
Ben Did you pick your welfare check up tonight?
you can thank the liberal/ndp, tax after tax, carbon taxes is just a scam
It only took 11 years of Liberal incompetence to destroy the living standards of Canadians.
But Carney swore there’s no affordability issue in canada!
High taxes out in Ontario and East. This is all so laughable as they are happy what crumbs the Liberals give them. Glad we don’t live by the same ideology in Western Canada.
@Ben
Are you serious? The ONLY people responsible for our economy are the people leading it. Not our neighbors. Not the opposition. Just our leaders.
Somebody drives a car off a cliff and you blame the passenger for not screaming STOP nice enough?!
But but but….. Trump bad they said.
His fault they said…..
In reality we are because of the liberal government and its policies. I cant put the words i want to on here without the censorship but….. to those that voted for and still support them consider my words about you to be bad!!
The best solution to financial problems is to stop voting for idiot socialists who can’t figure out how to run an economy.
Never have champagne dreams on a beer budget. Live within your means. Also, minimum wage is not meant to be a career. Get skill sets that the market needs and will pay for.
Hey Carnhole did you read this
Ben blames everything on Trump, even that Ben had to take a small yellow school bus as a child.
I don’t feel sorry for those out East that vote Liberal and live hand to mouth. A self fulfilling prophecy for them. I am
sitting good out in Western Alberta and plan to have a T-bone steak tonight with all the fixings. I made sure to invest wisely so that I don’t have to worry what the Liberals can’t provide as I don’t need it.
@Ben
Little buddy, Trump NEVER put tariifs on food
Carney did
Last year the price hike that was all him
The information is still available on the government website
The is year it’s Carbey who put 10% tariff on canned goods
Yeah that’s the tomato sauce going on your pizza too
Bon apetit
And thank Carney for it
“Judge me by the prices at the grocery store “ Mark Carney
When are you guys in the East finally going to get your act together and realize that your vote brought this upon you
You got scammed, big time
Hunger is the best teacher
I hope you are learning a valuable lesson here
Sorry Ben. You are quite erroneous. Canada was battling with these issues , especially food inflation way before Trump but on limited sectoral tariffs in January 2025.
Welcome to the poor club, it is good for the soul. Keep voting Liberal, Canucks…
Ben….There is no tariffs on food in which Canada has the highest inflation in the G20. Plus food inflation was high back in 2023 when Trudeau and Champagne promised lower prices by Thanksgiving. Another failure by this Liberal Govt.
Canada is a toilet bowl full of turd
Total failure by Carney. He did tell us to judge him at the prices in Canadian grocery stores.
Over 92% of Canadian industries are protected by CUSMA and not affected by US tariffs. The blame for this lies solely with the LPC.
Long past time for a mandatory living wage tied to inflation
Life choices that you made…live within your means..and maybe think about not having kids if you can’t afford them, instead of relying on government hand outs.
They are finally admitting that Canadians are struggling with basic day to day expenses and food prices. This all falls at the feet over the last 11 years of economic incompetence by the Liberal govenment
@ Ben what trade negotiations. Carney and this Liberal govt have done nothing to deal with the tariffs or the price of food going up monthly not to mention day to day living expenses. All Carney has done is travel the world and achieved nothing.
The blame lies squarely with Trump and his cheerleaders in the Poilievre conservative party who just badmouth Canada and aren’t supporting Team Canada in trade negotiations.
Anyone else think this is largely due to 11 years of Liberal mismanagement?