Nearly half of Albertans worry interest rate bumps may mean financial trouble: poll

Debt-burdened Albertansfeel they can stave off bankruptcy but are the least optimisticin thecountry about their overall debt loads, a new survey suggests.

The quarterly consumer debt index released Monday by national insolvency firm MNP Ltd. says Albertans are the least likely among Canadians, at 22 per cent, to say theirdebtsituation has improved compared to five years ago.

The survey also found that nearly half of Albertans say that if interest rates go up much more, they are afraid they will be in financial trouble.

That's the highest proportion compared to the other provinces, the firm said in a press release issued Monday.

• Canadians owe on average $1.70 for every dollar they have in disposable income

But the survey did note a 30 per cent drop in the proportion of Albertans who think an interest rate hike will nudge them into bankruptcy.

"While it's reassuring to see that fewer Albertans are concerned about being pushed towards bankruptcy as a result of interest rate increases, it's clear many aren't out of the woods just yet," Calgary-based MNP insolvency trusteeDonna Carson said in thepress release.

"Many would undoubtedly struggle to absorb higherdebtservicing costs and we will start to see more delinquencies."

Four in 10 Albertans feel that they are $200 or less away from financial insolvency at month's end, up three points since the last survey in March.

High consumer debt

The insolvency firm notes that Statistics Canada figures show householddebtratios saw their biggest drop on record, and that new mortgage rules and higher interest rates seem to be helping to slow the pace of borrowing.

"Canada as a whole seems to be slowly cutting back, but Albertans continue to carry the largest amount of consumerdebtin the country, and that's concerning," Carson wrote.

"While Albertans have been able to shoulder thosedebtsover the last few years with low interest rates, I would caution them not to be overconfident. It's time to make some significant changes."

Nationally, the survey found that worries over rising interest rates have decreased since March with 28 per cent of Canadiansconcernedabout moving towardbankruptcy, down fivepoints from the previous quarterly survey.

The online survey was conducted betweenJune 15 and June 19 for MNP Ltd. by Ipsos with 2,001 Canadians.

For comparison purposes only, a probability sample of the same size would yield a margin of error of plus or minus 2.5 percentage points, 19 times out of 20.

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