More Canadians are cutting back on food, heat, and care as day-to-day survival replaces budgeting
Canadians are now so financially stretched that nearly half are within $200 of being unable to pay their bills each month, with many forced into “heat or eat” decisions as household budgets buckle under economic pressure.
The latest MNP Consumer Debt Index reveals that 48 percent of Canadians are teetering on the edge, up six points from last quarter, while the average amount left over after monthly expenses has dropped sharply to $744 from $916.
The situation is especially acute for younger adults and middle-income earners, who have seen the steepest declines in disposable income.
This growing vulnerability is driving Canadians to make difficult trade-offs.
Three in ten (29 percent) have reduced their utility consumption, and a quarter (24 percent) are eating less to save money.
One in five (19 percent) are delaying or skipping medical, dental, or prescription care, underscoring the impact on overall well-being.
Even as households cut back, financial cushions continue to shrink, leaving many exposed to even minor unexpected expenses.
The Index itself dropped two points to 86 this quarter, its lowest September reading since 2023, highlighting the fragility of household finances.
“Some households are stretched so thin that even basic expenses feel overwhelming,” says Grant Bazian, president of MNP LTD. “When people are cutting back on food, heat, or medical care, it’s not just about budgeting anymore — it’s about day-to-day survival. That level of strain takes a huge emotional toll.”
Debt management is becoming increasingly urgent.
Nearly a third (32 percent) of Canadians now carry a revolving balance on their credit cards, with an average balance of $4,616.
The net personal debt rating fell three points this quarter to +18, the lowest September score since 2023. Only a third (37 percent) rate their debt situation as “excellent,” while one in five (19 percent) describe it as “terrible.”
Even with the Bank of Canada’s recent rate cut to 2.5 percent, nearly two-thirds (63 percent) say they desperately need rates to go down, and more than two in five (44 percent) remain concerned about their ability to repay debt even if rates decline.
Job insecurity and technological disruption are compounding the stress.
Confidence in handling a job loss has fallen by four points this quarter, and 44 percent worry that artificial intelligence could negatively affect their job or income.
This concern is particularly pronounced among younger and lower-income Canadians, who also tend to have less in emergency savings.
Fewer than half (46 percent) of Canadians report having six months of emergency savings, leaving many households vulnerable to income shocks.
Despite the challenges, Canadians are adapting their spending habits.
More than half (51 percent) are grocery shopping strategically, using meal plans, bulk buying, coupons, and price matching. Contactless payments and mobile transactions continue to rise, reflecting a shift in consumer behaviour.
Credit cards and debit cards remain the preferred payment methods, together accounting for 63 percent of total payment volume.
However, the rise in delinquencies and shrinking financial buffers signal that many are relying on credit to bridge the gap between income and expenses.
Licensed Insolvency Trustees are positioned as a resource for those seeking relief, offering free, confidential consultations and federally regulated debt solutions.
“Seeking help from a Licensed Insolvency Trustee isn’t a last resort — it’s a smart step that can help people regain control sooner and avoid long-term damage,” says Bazian.
