More than half of Canadians couldn’t handle $200 monthly expense increase.

More than half of Canadians are now within $ 200 of being unable to handle their monthly costs, a new debt survey shows.

In yet another i ndication of the mounting debt many Canadians are taking on, MNP Debt, part of the personal insolvency business of Calgary- based MNP LLP, said 56 per cent of those polled — up from 48 per cent surveyed six months ago — are close to facing negative cash flow should they take on up to another $ 200 in monthly debt.

The online survey of 1,502 Canadians conducted between Sept. 6 and Sept. 12 also found 31 per cent are already not paying their bills on time, making them technically insolvent, MNP says.

“I’m sure there are many households on the edge. It’s not new, but if you look at the debt- service ratios, they have been grinding up too,” said Doug Porter, chief economist with Bank of Montreal, referring to the amount of money relative to income needed to cover principal and interest costs. “The concern is obviously if we did get a sustained increase in interest rates.”

A survey this month from TransUnion found 718,000 Canadians can’t even absorb a 25- basis- point increase in interest rates without being in a negative-cash-flow situation. One percentage point would drive 917,000 over the edge, the credit rating agency found.

Canadians are showing no signs of slowing down their debt consumption. The latest numbers from Statistics Canada indicate household debt as a ratio of disposable income rose to 167.6 per cent in the second quarter from 165.2 per cent in the first quarter.

Porter said about 70 per cent of debt is tied up in mortgages and tied to booming housing markets. But in general there might be a sense of “the boy who cried wolf ” when it comes to getting consumers to believe they could face a jump in interest rates, which stand at 2.7 per cent for a loan tied to the prime lending rate.

MNP said there is some positive news about debt costs. More Canadians now say they are concerned about their debt — 52 per cent, up from 43 per cent six months ago.

“It’s actually positive to see that a growing number of Canadians are concerned. Many households have come to rely on cheap credit in order to cover expenses, but we can’t continue to be comfortable taking on more credit to finance a lifestyle we can’t afford,” said Grant Bazian, Toronto- based president of MNP Debt.

TAKING ON MORE CREDIT TO FINANCE A LIFESTYLE WE CAN’T AFFORD.