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Measuring the State of Canadians' Debt

By Grant Bazian, President of MNP’s Insolvency Practice

Many Canadians continue to struggle with financial uncertainty and not knowing whether their job will still be around after the pandemic.


  • Half (47%) of Canadians now say they are $200 or less away from insolvency, a four-point increase from last quarter.

  • Many Canadians may find themselves needing help to deal with debt levels as pandemic challenges have added to pre-existing debt issues.

  • Customized debt guidance is the best path forward. Bankruptcy is really the last course of action.

For the past four years, MNP’s Consumer Debt Index has measured changes in Canadians’ ability to meet their monthly payment obligations and their concerns about their debt situation.

As of today, the Index currently stands at 94 points, the second-lowest reading ever — on the heels of a record-low in March of this year.

The income loss as a direct result of the pandemic means more Canadians are even further away from the ability to pay off existing debts and thus puts them in severe financial distress. Those earning less than $40,000 a year, renters, women, and millennials are the most likely to say their current debt situation is worse than it was in the past. These groups are also at higher risk of insolvency, according to our research.

Several indicators making up the MNP Debt Index point to increased debt trouble, particularly as payment deferrals and government emergency aid programs run their course. Half (47%) of Canadians now say they are $200 or less away from insolvency, a four-point increase from last quarter. This includes 26 percent who indicate they are already insolvent to begin with, also up four points.

There are other signs more trouble could be on the horizon as bills quickly become due. Four in 10 Canadians (43%, +3) say they’re worried about their current level of debt, the second-highest proportion since 2017 (peaking 46 percent in March 2020). Furthermore, whether one has a job or not, the fact remains that four in 10 (39%) are still worried either they or someone in their household could lose their job; unchanged from the last wave. And, women are increasingly concerned about job loss in their household (42%, +3).

Given the challenges this year has presented and the underlying issues which pre-date the pandemic, many Canadians are now in a position where they need help to deal with their debt. These individuals need to know there is a vast system in place — a network of MNP Licensed Insolvency Trustees across the country who can offer customized guidance to help them determine the best path forward.

Bankruptcy is one option, but it is really the last course of action after exhausting all other available avenues. Depending on the extent of the debt and the individual’s income, dealing with debt problems may involve some combination of the following:

Steps on the Path to Debt Recovery

1. Budgeting

Creating a monthly financial plan to help track income and expenses and potentially free up more cash to pay down debts.

2. Refinancing

Re-negotiating the term and interest rate on existing credit accounts to reduce the monthly cost of debts and make them easier to repay.

3. Liquidating

Selling high-value assets such as vehicles, recreational properties, sporting goods, and jewelry to provide the financing needed to pay down debt.

4. Consolidating

Combining all debts into a single monthly payment with a lower average interest rate to reduce the number of payments and their total cost.

5. Consumer Proposal

Working with an MNP Licensed Insolvency Trustee to negotiate a legally binding debt settlement with creditors that will reduce the amount owing, but cannot extend past five years.

6. Bankruptcy

A legal process that provides immediate protection to individuals experiencing financial trouble and can extinguish debts through a combination of potential asset liquidation and monthly payments.

Everyone’s debt situation is different which is why MNP offers professional, unbiased advice. Visit to learn more.