As inflation rises to its highest level in Canada in forty years, nearly half of Canadians say they are doing worse financially now than they did last year.
Another third say they expect things to get worse next year, the largest number of people responding in this way for more than a decade.
The figures come from a new study by the Angus Reid Institute (ARI), published on Friday, which surveyed more than 5,000 Canadian adults between June 7 and June 13 on their financial situation and struggles.
The results shed light on the plight of Canadians facing coast to coast.
Inflation is currently a staggering 7.7 percent higher than last year, according to Canadian statistics. Inflation has not been so high since 1983, the year Canada Day replaced Dominion Day.
TREND DOWN
The percentage of Canadians who say they are in a worse financial position now than a year ago has been rising steadily over the past few years. In 2018, only 29% of Canadians said they were doing worse than the previous year. This number rose to 32% in the first quarter of 2020, then to 45% in the second quarter of 2022.
It is now the highest since ARI began tracking this particular issue in 2010.
At the same time, the number of Canadians who said they were doing the same as a year ago fell from 54% in 2018 to 44% in 2020 to 36% in the second quarter of 2022.
Interestingly, the percentage of Canadians who say they are doing better than the previous year jumped to 23 percent in 2020, after hovering around 13-14 percent for years. Now that number is 17 percent.
When these results are broken down into respondents’ household incomes, those in the upper echelons of income earning more than $ 200,000 a year are much more likely to say they are doing better financially than last year, with 26 percent, and least likely to report worse performance, at 30 percent.
At the other end of the scale, those earning less than $ 25,000 a year are more likely to say they’ve been worse this year, by 51 percent, and less likely to say they’re doing well. better than last year, by 15 percent – emphasizing that the rich are less hurt by changes such as inflation, and the poor continue to impoverish as rising spending hits their portfolios.
Only one in five Canadians said they expected things to improve in a year, while a third expected things to get worse.
“Saskatchewan residents are most pessimistic and least optimistic about this issue,” the report said.
THE COST OF LIFE IS EXCEPTIONAL FOR MANY
Concerns about the cost of living are the ones that consume the time and energy of most Canadians, with food, housing and bills causing a huge amount of financial worries across the country.
When asked which are the most important provincial issues, with respondents being able to choose up to three options, “cost of living / inflation” is predominantly the most popular choice, with 63% of respondents choosing it as a major problem.
Healthcare and housing affordability ranked second and third with 52% and 31%, respectively, with climate change and the environment ranking fourth with 26%.
“Some regions of the country are under greater economic stress than others,” the report said. “In Atlantic Canada, the cost of living was already higher than in most other parts of the country last year. Both Newfoundland and Labrador, Nova Scotia and New Brunswick have higher inflation rates than other provinces, along with Manitoba and British Columbia. “
As for the country as a whole, more than half of tenants said it was difficult to afford rent.
For homeowners, monthly mortgage payments are rising after a series of interest rate hikes by the Bank of Canada. A quarter of Canadians with a mortgage say prices have already risen, while another half say they expect prices to rise. Two-thirds say that if their payments increase by $ 300 a month, they may not be able to afford it anymore.
“The challenge for many, as support from the pandemic era has been lifted and some are struggling to pay off the CERB they have received, is to avoid creating debt,” the report said, noting that many Canadians are already struggling with debt. .
Two out of five Canadians said they had credit card debt.
Of those who performed well in the ARI’s economic stress index and were classified as “troubled” by this index, 62% had credit card debt, and three out of five in this group said it would take more from a year to pay it off.
The Economic Stress Index, created in January, looks at key quality of life costs, such as debt, housing and household food costs, as well as respondents’ concerns and assessments of their own finances, to determine who is more difficult. time.
There are four categories: struggling, awkward, comfortable and successful. The share of those who “thrive” has dropped by six points since May, while the number of those who “fight” has increased by three points during this period. Some good news is that 29% of Canadians fall into the “comfortable” category, compared to 26% in May.
“The majority in each of the Atlantic provinces fall into the ‘struggling or uncomfortable’ category, the report said, with 55 per cent in Nova Scotia and 64 per cent in Newfoundland and Labrador falling into one of those two categories.
Across the country, in most provinces, more than half of respondents fall into one of the bottom two categories, with 64 percent in Newfoundland and Labrador, 59 percent in Alberta, 62 percent in Saskatchewan, 57 percent in Manitoba and 55 percent in Nova Scotia. and 54% in Ontario. Prince Edward Island was not included in the study.
“In Quebec alone (61 percent) and British Columbia (52 percent), more than half fall into the first two categories of ESI,” the report said. “In particular, according to the CPI of Statistic Canada, these provinces have the lowest cost of living in any province in the country.”
The province with the highest percentage of Canadian respondents considered “thriving” is Quebec with an incredible 30 percent.
Just over 75% of Canadians say their province has done a bad job of tackling inflation.
About one in three Canadians said their spending on petrol has increased, with just under half saying it has fallen for them because they deliberately avoid driving and look for other forms of transport to save money.
PRICES OF FOOD THAT LEAVE SOME HUNGRY
The report notes that inflation affects some goods more than others.
“Food inflation was 10 percent in May, higher than headline inflation of 7.7 percent,” the report said.
Just over half of Canadians surveyed say they struggle to bill for groceries each month, the report said, seven points higher than last October.
And the lower your tax group, the harder it is to put food on the table. Seven out of ten Canadians who earn less than $ 25,000 a year say they find it difficult to feed themselves and their families, while at least a third of all incomes report finding it difficult to plan food.
A BC resident told the Canadian Press that her food bill had more than doubled. Food Banks Canada is concerned that more and more children – who make up a third of those who rely on food banks – may go hungry this summer as school closes and access to school food programs is cut off.
Earlier this month, NDP leader Jagmeet Singh called on lawmakers to laugh in the House of Commons after he said Canadians could not afford food. A video posted by Singh about the incident laughed after he said one in four Canadians was hungry.
“I just mentioned that Canadians are hungry and I hear laughter in the halls,” Singh said after the president asked him to repeat. “They should be ashamed of themselves. Absolutely a shame. “He said on social media that those who laugh are Conservative MPs.
TRUST IN INSTITUTIONS
Against the backdrop of rising inflation, the Bank of Canada aims to minimize the impact on Canadians through policy adjustments, but Canada’s confidence in this institution is divided, according to the study. While 46% say they believe in Bank of Canada, 41% say they don’t.
When the respondents’ political leanings were taken into account in the survey, the results became clearer: former supporters of the Conservative Party and the People’s Party of Canada were less likely to trust the Bank of Canada, with 59% and 86% saying so, respectively. .
The Bank of Canada has acknowledged that it has made mistakes and is now playing catch-up as Canada’s economy overheats.
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