'Growing sense of concern': Albertans worried over rising debt loads, report says

Albertans are the most concerned about the pressures of household debt, with seven in 10 residents in the province anxious about their own bills, new data shows.

The MNP Consumer Debt Index, released Monday, says "significantly more" Albertans are worried about the amount of debt they've accumulated in their lives and are the most likely in Canada to have made only the minimum payment on credit cards.

According to the data, which was compiled through an online survey of 2,000 Canadians between Nov. 28 and Dec. 4, 2023, one in five Albertans who responded said they needed to take money from savings, home equity, retirement funds or other areas for daily expenses.

"Credit spending has been a lifeline for many individuals grappling with rising costs, and we see from the data that the burden of repaying that debt is intensifying the growing financial pressure on many households, especially amid higher interest rates," said Donna Carson, a licensed insolvency trustee with Alberta-based MNP Ltd.

"Essentially, the majority of things cost more, paying debts costs more, which is fostering a growing sense of concern about debt repayment and managing day-to-day expenses."

The situation also costs Albertans their mental health, with three in five respondents saying their financial situation causes anxiety (59 per cent) or "stresses them out" (57 per cent).

"As living expenses surge, households already stretched thin may still find themselves accumulating further debt just to meet basic needs," Carson said.

"They are trying to fill a hole by digging a new one – a situation that can have a disastrous impact on their finances.

"At a certain point, some come to the realization that there is no clear way to settle their debts, regardless of the timeline or interest rate."

Interest rates continue to be a top concern for Albertans, the report suggests, as "many are pessimistic about their ability to absorb further interest rate hikes."

MNP says the ability of Albertans perceiving their debt situation has improved over the past year, primarily because of many adopting sound financial management strategies.

According to the survey, 24 per cent of Albertans say their debt situation as better than it was a year ago.

"Over the past year, many households made efforts to closely manage their finances and adjust to higher interest rates, which may be leading some to feel more prepared, but not everyone has made the same progress," said Carson.

Despite that progress, she says with holiday bills, mortgage renewals and continued rising costs, Canadians could be reaching "a crisis point."

'THEY WANT ACTION'

The Official Opposition says MNP's data needs to be "a wakeup call" for Danielle Smith and the UCP government.

In a statement on Monday, Alberta NDP finance critic Samir Kayande says Albertans have been suffering for some time, but the report is "heartbreaking."

"Albertans have trailed other Canadians with the lowest wage growth of any province since the UCP was elected in 2019. Now, Albertans are struggling with personal debt more than any other province with 71 per cent of Albertans living in fear of not being able to pay their debts," he said.

"Albertans don’t want lip service, they want action. The UCP need to keep their promises to Albertans and deliver tangible financial relief."

In an emailed statement Monday, the province noted initiatives and programs that help keep some costs down for Albertans.

“We know many Albertans continue to struggle with high costs, which is why we’ve taken action to keep life affordable,” Savannah Johannsen, a spokesperson for the Ministry of Treasury Board and Finance, said in the statement.

“Personal income taxes are now indexed to inflation. Insurance reforms are putting the brakes on rising auto insurance rates for good drivers. Alberta’s government made the fuel relief program permanent so Albertans will continue to save some or all of the provincial fuel tax when oil prices are high.”

More information on MNP's Consumer Debt Index can be found online.

With files from CTV News Calgary's Teri Fikowski