Most Canadians say they have cut back on spending in recent months, and two-thirds of Canadians say they are stressed about money, according to data published by the Angus Reid Institute.
The research also found that more than half of Canadians cannot keep up with the cost of living.
“Four in five say they have cut back on spending in the past few months by either cutting their discretionary budget, delaying a major purchase, driving less, cutting back on travel and charitable giving, or deferring saving for the future,” says a report from the independent investigative agency.
In a study of 2,279 respondents, 42% said they were delaying a major purchase, 41% said they were driving less, and 57% said they were cutting back on discretionary overhead.
However, some Canadians are experiencing more financial stress than others.
According to Angus Reid, Canadians in Saskatchewan and Atlantic Canada are 50 percent more likely than those in other parts of the country to “use a sudden gift of $5,000 to pay off debt,” if given one.
The nonprofit’s research also indicated that people in Alberta and the Maritimes are more likely than those in other parts of the country to say they’ve been cutting back on spending in recent months.
Older Canadians, the findings suggest, report that they are better positioned to “endure unforeseen expenses.”
In the study, three in five respondents over the age of 54 said they might spend an extra $1,000 this month, “compared to two in five among their younger peers.”
“Those in the 35-54 age group are least likely to be able to comfortably afford additional expenses,” the report reads.
With a recent decline in the cost of gasoline and food across the country, economists have pointed to a slowdown in Canada’s year-on-year inflation, which fell to 7.6 percent in July.
Experts have also revealed that June saw a likely spike in the headline inflation rate, with the nearly 40-year high of 8.1 percent resulting from monthly increases since June 2020.
Data published by Statistics Canada That showed a 35.6 percent increase in gasoline prices in July compared to a year ago, which is substantially lower than June’s 54.6 percent increase in fuel costs.
But Canadians are still feeling the brunt of inflation, with food costs in July rising 9.9 percent from a year ago, and that sentiment could deepen as recession fears rise.
RBC predicts that the Canadian economy is on track for a “mild recession” in 2023, as a result of staff shortages, jobless claims, and the delayed economic ramifications of pandemic restrictions leading to GDP growth of less than 1 percent .
Although this result is uncertain, Angus Reid reports that consumer confidence is taking a hit, with 76 percent of respondents to his study saying they are “stressed about money.”
As inflation remains above the Bank of Canada’s 2 percent target, the central bank is preparing to make its next interest rate announcement on September 7.
The Angus Reid Institute conducted an online survey August 8-10, 2022 among a representative random sample of 2,279 Canadian adults who are members of the Angus Reid Forum. For comparison purposes only, a probability sample of this size would have a margin of error of +/- 2.0 percentage points, 19 times out of 20.”