More than half of British Columbians are feeling the squeeze of recent interest rate hikes, according to the latest MNP Consumer Debt Index.
Last week, Canada’s benchmark interest rate rose half a percentage point, marking the first time it has raised rates by more than 25 basis points in more than two decades.
One in three B.C. residents reported concerns that rising rates could drive them closer to bankruptcy, while 60 per cent said they were concerned about their ability to pay their debts.
The MNP Consumer Debt Index, conducted by Ipsos each quarter, measures Canadians’ attitudes toward their consumer debt, and evaluates their ability to pay bills, cover unexpected expenses and absorb interest rate fluctuations.
Between March 9 and 15, Ipsos surveyed 2,000 Canadians over the age of 18, and weighted the sample to reflect the composition of the country, according to federal census data.
Since the last financial quarter, the debt index found British Columbians had the largest decrease in disposable income across the country after having the most disposable income last quarter.
On average, they are down about $269 a month, leaving $734 of disposable cash, which is still among the highest amounts in Canada.
“What we’re seeing is a lot more uncertainty for British Columbians and a lot more concern about their finances,” said Linda Paul, MNP licensed insolvency trustee.
“I was not surprised to see the results. We’ve been doing this for a long time and the more we do it the more we see people feeling a bit more insecure about their finances.”
Forty-six per cent of B.C. survey respondents reported they were $200 away or less from not meeting all of their financial obligations each month. That includes 34 per cent who said they already fall short on their bills and debt payments.
Compared to other provinces, however, the index found British Columbians are the least likely to say they’re concerned about their current debt level, and the least likely to regret the debt they’ve taken on.