In Atlantic Canada, many households are reaching payday with little breathing room because regular costs and debt are already claiming that income in advance.
As NTV reported, MNP's latest regional snapshot shows that 68% say at least half of their income is already tied up before they receive it. And 14% say they are relying on borrowing to keep plans and activities intact.
What's happening?
These numbers come from the latest MNP Consumer Debt Index, which Ipsos conducts every quarter. Respondents in Atlantic Canada were the most likely in the country to say a large portion of their paycheck had been claimed before payday, NTV noted.
Financial pressure showed up in several ways. MNP said in a press release that 46% of people were within $200 of being unable to cover monthly bills and debt, and 22% said their income does not fully cover those payments.
At the same time, 42% said most of their paycheck was already accounted for before it arrived, while 16% said all of it was or that their expenses were greater than the income they were expecting.
Tina Powell, a licensed insolvency trustee with MNP, said this pattern is not the same as simply living paycheck to paycheck.
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"Bills, debt payments and regular expenses are already waiting for it, meaning much of that income is effectively pre-spent before it is received," Powell said in the release.
Why is this concerning?
MNP said almost half of respondents reported struggling to get ahead. An equal share has started scaling back on spending for things like clothing and personal care.
Leisure spending is decreasing too. Many people are cutting back on travel, dining out, and other experiences.
There's no denying the fact that many people are worrying about affordability in the U.S. as well. Higher fuel prices and electricity costs are stressing many households.
Having a good time doesn't always mean spending money. Even so, most people are facing a reality where paying bills is difficult or impossible to do. And while some stores may look like they're lowering prices to make things more affordable, those actions can be deceiving.
What's being done?
According to MNP, while the Bank of Canada has kept its key rate steady this year, many households still say they cannot absorb higher borrowing costs.
Powell said the warning signs can be less visible than many assume, often showing up first as reduced savings or heavier reliance on credit.
"Contacting a Licensed Insolvency Trustee doesn't mean a person has already chosen to file a bankruptcy or consumer proposal," Powell said in the release. "That initial conversation can simply be a first step to better understand their situation."
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