British Columbians continue to take steps to safeguard their finances amid ongoing economic uncertainty.
Roughly three-quarters of provincial residents say they have cut back on spending due to uncertainty (74 per cent), and are delaying major purchases or investments (75 per cent), according to the MNP Consumer Debt Index.
The majority (79 per cent) say the current economic uncertainty has made them more cautious about taking on new debt. Well over half (58 per cent) express heightened concern about their ability to pay off debt due to ongoing uncertainty.
This concern extends to broader financial stability, with about one-third (32 per cent) worried about the possibility of someone in their household losing their job. However, a higher proportion this quarter believes they will be able to cover living expenses in the next year without needing more credit (58 per cent) and fewer regret the amount of debt they have taken on (40 per cent).
“We’re seeing some signs that British Columbians may be feeling a bit more positive in their financial outlook after the Bank of Canada’s two interest rate cuts this year. While uncertainty continues – particularly around U.S. tariffs – their on-and-off behaviour may be providing a bit of hope about what the potential impact on household budgets will be,” explained Linda Paul, a Licensed Insolvency Trustee with MNP LTD.
Even with British Columbians taking steps toward financial caution, there was no positive shift in how individuals rate their personal debt situation this quarter. Those who rated their debt situation positively plateaued (37 per cent, unchanged), while those who rated it negatively (20 per cent) remained relatively stable.
“The results suggest that while British Columbians say they have taken proactive steps to reduce spending and lessen their use of credit as they brace for potential financial hardship ahead, those efforts may not have made a meaningful impact yet on those close to insolvency,” says Paul.
She points to the fact that slightly more residents (48 per cent) report being just $200 or less away from financial insolvency, unable to meet their bills and debt obligations each month. Three in ten British Columbians continue to say they are already insolvent (30 per cent).
“Close to half of British Columbians still report being on the brink of insolvency, and three in ten report having zero wiggle room, flexibility, or financial cushion. Without that buffer, many may be vulnerable as increases to living or housing costs – or an unexpected loss of income – could lead to serious financial hardship,” added Paul.
Two in five (39 per cent) of BC residents say they are bracing for an increase in housing costs within the next year.
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