According to the survey, which was conducted in early September of about 2,000 Canadians and then administered as part of the MNP Consumer Debt Index, which measures Canadians’ attitudes toward their consumer debt and measures their ability to pay their bills, the number of Albertans who say life’s necessities are becoming less affordable has increased significantly since December 2021.
Nearly six in ten Albertans (58 per cent) feel it is becoming less affordable to support themselves and their families, while more than half of those surveyed also said transportation is becoming less affordable than any other province in the country. Another 56 percent of respondents said clothing and household items are less affordable than in any other province.
“Albertans are having to put more of their paychecks aside to afford basic necessities as the cost of living rises, leaving less financial buffer to cushion the impact of current and future interest rate increases,” said Donna Carson, a licensed company. Insolvency Administrator for MNP LTD based in Alberta.
Consumer insolvencies in Alberta rose 7.3 per cent in August from the previous month and rose 26.2 per cent compared to the same month last year, according to recently released statistics from the Office of Bankruptcy.
However, fewer Albertans (47 per cent) appear to be approaching insolvency since the last quarter, down seven points. Financial insolvency means that a person is $200 or less away from being unable to meet all of their financial obligations.
“I should point out that almost half of Albertans are still only $200 away from not being able to cover all of their bills and debt obligations,” Carson said. “Overall, there is less room in their budgets and that means any increase in interest rates or the cost of buying essentials could push individuals closer to insolvency in the future.”
While Albertans are in a vulnerable financial situation, there is some optimism emerging, according to MNP. Fewer now rate their personal debt situation as dire (18 percent), down six points from last quarter.
“This newfound optimism we’re seeing may only be temporary. The economic situation here is still evolving and the full impact of interest rate hikes often takes time, so right now people may really be experiencing a false sense of optimism,” Carson points out. “With this in mind, I would encourage households to be prudent with their finances for the time being. Only time will tell the full impact of the economic situation we are in.”
While the survey is only a sample of Canadians’ attitudes toward their finances, it hasn’t gone unnoticed locally that more and more Airdronans themselves are struggling. In previous reports, Airdrie’s Food Bank said that with each passing month, more and more residents of the city are using the food bank. Last year, the HungerCount Report showed a 26.9% increase in Albertans accessing food banks; which represents more than 116 thousand visits in March 2021, which is one of the highest visits in the country.
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