More than half (52%) anticipate weakness in unemployment and job market
Financial troubles among workers may become a bigger problemt for employers this year.
Canadians are bracing for a tougher financial year in 2026, with large majorities expecting the cost of living, housing affordability and the broader economy to deteriorate, according to the latest MNP Consumer Debt Index.
The survey shows 71% of Canadians expect the cost of living to worsen this year. A majority also believe the economy overall will deteriorate (59%), housing affordability will get worse (59%), and pressure from interest rates and inflation will increase (54%).
More than half (52%) anticipate weakness in unemployment and the job market.
“Many Canadians believe that household finances will come under increasing pressure, fuelling heightened anxiety about economic security in the year ahead,” says Grant Bazian, president of MNP LTD. “Canadians expect most aspects of daily life to worsen rather than improve in 2026.”
Overall, Canadian are expecting the following this year:
- higher taxes (53%)
- worsening transportation costs (50%)
- higher healthcare costs (48%)
- rising poverty and inequality (62%)
- worsening government deficit and debt (66%)
The cost of living (61%) is at the top of the list of worries, according to a previous report.
How do Canadians deal with financial pressures?
Canadians’ responses to financial strain are sharply divided. Nearly three in five (59%) are taking what MNP describes as a “fight” approach, including:
- adjusting their budgets (43%)
- attempting to consolidate debt (12%)
- seeking advice from a financial professional (11%).
Almost one‑third (32%) are in “flight”, avoiding thinking about their financial responsibilities (12%), steering clear of financial discussions with family or professionals (15%), or relying on credit to cover essential expenses (17%). A further 15% say they feel financially frozen and unsure where to begin.
“Many Canadians are in financial flight mode, which can create a false sense of short‑term relief,” Bazian said. “Avoiding bills and conversations about finances or relying more heavily on credit can make financial stress feel manageable in the moment, but those behaviours often allow problems to grow quietly in the background. This can make it harder to regain control later on.”
Younger adults and lower‑income Canadians are more likely to exhibit avoidance behaviours. Canadians aged 18 to 34 are significantly more likely to adopt a flight response (51%) when under financial stress, are the most likely to feel financially paralysed (23%), and are more likely to avoid discussing financial matters with family or professionals (22%). A third (34%) of those earning under $40,000 report flight‑type behaviours.
More people are postponing retirement due to financial pressures, according to a previous report.
How can employers help employees who are struggling financially?
According to Your Money Line, January sets the tone for an organization’s financial wellness strategy.
“This is the ideal time to assess employee needs, review last year’s metrics, and establish goals, budgets, and priorities for the year ahead,” the company says.
They suggest the employers do the following:
- Quickly evaluate your organization’s financial wellness maturity and identify where to focus your 2026 strategy.
- Learn how to maximize wellness budgets and allocate funds to high-impact financial wellbeing initiatives.
- Explore how AI will reshape benefits education and enhance the impact of your employee wellbeing programs.
- Get a strategic overview of the trends shaping employee wellbeing and how they connect money, mind, culture, and performance.
“By implementing financial wellness initiatives in your workplace, you will be empowering your employees,” according to the Financial Consumer Agency of Canada. “They will feel more in control of their money and have improved financial, mental and physical health. This will lead to a more productive workplace and a more engaged workforce. It can also result in increased profits and lower costs for your business and enhance your reputation as an employer of choice.”
Over 2 in 3 (67%) workers in Alberta have been distracted by financial concerns at work in the past month, according to a previous report.
