35% of Albertans don’t make enough money to cover their bills, debt payments: study

Alberta’s consumer debt is the highest in the country and the number of Albertans who can’t pay their bills or repay debt continues to grow, a new study shows.

READ MORE: Alberta still has the highest consumer debt in Canada 

The MNP Consumer Debt Sentiment Survey is a semi-annual poll that tracks Canadians’ feelings about their debt and their ability to meet their monthly financial obligations.

The survey found the number of Albertans who are worried about their current debt situation has risen substantially in the last six months. In February 2016, 42 per cent of respondents said they were concerned. Now, 53 per cent are worried. The same number regret the amount of debt they’ve taken on, the survey found.

READ MORE: Fuelled by mortgage growth, Canadian household debt rises to new record high 

“Given the downturn in Alberta, it’s not surprising that Albertans are concerned about their finances. What is surprising is the number who say they are living on the edge of financial crisis,” Zaki Alam, an Edmonton-based licensed insolvency trustee with MNP Debt, said.

“With so many feeling unable to cover their bills and debts, there is tremendous vulnerability to any kind of economic shock; the loss of a job, an emergency, a divorce, even things like a reduction in overtime pay or bonuses or an increase in interest rates.”

TIMELINE: Tracking the layoffs in Alberta’s oil patch 

The survey, which polled 1,502 Canadians from Ipsos’ online panel between Sept. 6 and Sept. 12, 2016, found:

• Fifty-three per cent are concerned about their current level of debt (up 11 points since February).
• Thirty-five per cent now say they don’t make enough to cover their bills and debt payments (up 14 points since February).
• Almost 40 per cent are concerned that rising interest rates could move them toward bankruptcy (up nine points since February).
• In Alberta, there was an 18-point increase in the number of residents who said they are $200 or less per month away from not being able to meet their bills each month. That represented the largest jump across the country.
• Forty-three per cent of parents in Alberta said they spent more than budgeted on back-to-school shopping for their kids.
• Thirty-three per cent “agree” they went over budget on recreation or vacations during the summer.
• Parents are more likely to be concerned about their debt situation than other Canadians. Six in 10 (60 per cent) parents are concerned with their level of debt.
• Debt concerns are also much stronger among middle-aged Canadians. Six in 10 (60 per cent) Gen X’ers are concerned about their debt situation, compared to 52 per cent of Millennials and 43 per cent of Baby Boomers.
• Residents of Alberta (35 per cent) and Ontario (35 per cent) are the most likely to describe themselves as financially insolvent, followed closely by Saskatchewan and Manitoba (34 per cent), the Atlantic provinces (32 per cent), Quebec (28 per cent) and B.C. (20 per cent).
• Concern about debt is strongest in the Atlantic provinces where 60 per cent worry about their current debt load, compared with 57 per cent of those in Saskatchewan and Manitoba, 53 per cent in Alberta, 52 per cent in Ontario, 52 per cent in Quebec, and 44 per cent in B.C.

READ MORE: Alberta unemployment rate now higher than Nova Scotia 

“Albertans have come to rely on cheap credit to fund their lifestyles and a significant number are now adding even more debt obligations as a result of job losses,” Alam said. “But interest rates will eventually rise. Those who already feel overwhelmed by their debt should seek professional help now.”

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Watch below: A new survey shows just how worried Albertans are about their finances. Nearly 60 per cent say they within $200 of not being able to pay their bills. While it’s a symptom of a struggling economy, the NDP is suggesting it believes the province is poised for a comeback. Tom Vernon reports.

1:52 NDP says Alberta poised for a comeback despite troubling economic signs