Data from the latest update from MNP Consumer Debt Index (CDI) shows Canadians saddled with debt could be “approaching a crisis point,” with pessimism at an all-time low. Canada’s household debt is the highest in the G7, according to the Financial Times. Servicing debt burns through a record-breaking amount of Canadians’ disposable income, largely attributed to rising mortgage payments. After intense inflation and increasing interest and carbon taxes implemented by the Liberal government, Canadians are starting to lose heart, the CDI study found. “Canadians’ current debt perception has reached an all-time low, with the impact of inflation and higher interest rates leaving them feeling the most pessimistic about their current debt situation,” the report said. A poll conducted by the insolvency agency found 63% of respondents are worried they may never be able to repay their debt the way things are in Canada. President of MNP Ltd. Grant Bazian said that between holiday purchases, approaching mortgage renewals and “costs continuing to increase, you can see how many Canadians could be approaching a crisis point both mentally and financially.”The study further found since 2021, there is a 5% increase in Canadians making minimum payments to service their debt (up to 26% of respondents) and a 7% increase in people who have borrowed money they are unable to promptly pay back (up to 18%). Meanwhile, 20% say they are stretching their paycheque to get by and 20% have taken from home equity or registered savings plans (RSPs) to service debt or pay for basic necessities. “Put simply, most things cost more, debt repayment costs more and that leaves more feeling pessimistic about paying off debts, making ends meet and about their financial futures on the whole,” Bazian said.The Bank of Canada paused interest rate hikes in September, but it is unclear when there will be a decrease in rates. The news brought hope for many Canadians at the time, but now BMO chief economist Douglas Porter notes 2024 rang in “sober reassessment of rate cut prospects.”“That short-lived revival in housing activity was probably a key factor in pulling the bank off the sidelines and back into the tightening game, so we are highly sensitive to signs that housing may be stirring,” Porter said.