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Albertans carrying more debt than anywhere else in Canada: report

Last Updated Apr 22, 2019 at 8:45 am MDT

Canadian $100 bills are counted in Toronto, Feb. 2, 2016. THE CANADIAN PRESS/Graeme Roy

CALGARY (660 NEWS) – Albertans are the most concerned about their current level of debt and their personal finances compared to other provinces.

Those are just some of the findings of a new consumer debt index released by MNP Ltd.

According to the survey, 64 per cent are worried about their ability to repay debts, 48 per cent are very concerned about their current level of debt, and 51 per cent are most likely to regret the amount of debt they have taken on in their life.

According to MNP, consumer insolvencies are up 25.3 per cent in Alberta compared to the same time last year and nearly half (48 per cent) of Albertans say they’re hovering close to financial insolvency, only $200 or less away from not being able to pay their bills.

“Albertans are maxed out right now and what makes the situation more alarming is that there is no real plan for paying back what they have borrowed,” says Donna Carson, Licensed Insolvency Trustee with MNP Ltd. “If the economy deteriorates further or interest rates rise, there’s going to be a significant number who will be forced into bankruptcy or insolvency.”

While there may be red flags about where the economy and interest rates are heading, that hasn’t stopped Albertans from continuing to borrow.

The survey reports that more Albertans, about 66 per cent, are taking on consumer debt compared to this time last year.

Half of those surveyed, 51 per cent said they won’t be able to cover all living and family expenses in the next 12 months without taking on more debt.

“For many Albertans, paying down debt or saving for the future is seen as more of a luxury,” says Carson, “Living on credit has become the only way to make some household budgets work and a whole industry has grown up around making that feasible, from payday lenders to credit card companies, to buy-now-pay-later retail offers.”

Despite the grim outlook and anxiety surrounding debt, Albertans are somewhat optimistic about their financial future.

Around 25 per cent of those surveyed believe their debt situation to improve next year, while 36 per cent expect improvement in the next five years.