What began at the beginning of the year with a slight twinge for many Canadians over rising prices has led to a place where nearly every adult in this country is spending less and bracing for more financial pain as inflation maintains a tight grip on the nation. Several are also canceling or postponing travel plans because of financial concerns.
The latest data from the non-profit Angus Reid Institute finds nine-in-ten Canadians (88%) now reporting belt-tightening measures, an eight-point increase from August.
They are most likely to be cutting back on discretionary spending (66% report this) and delaying major purchases (50%) in the face of continued financial uncertainty. Troublingly, fully one-quarter (26%) now say they are deferring contributions to their retirement or savings, up from 19 per cent who said the same six weeks ago.
The Bank of Canada announced another interest rate hike in early September – up 75 basis points to 3.25 per cent – as the battle against inflation rages on. Canadians are divided about what they would like to see going forward, with one-in-three (33%) saying they would hold the rate firm now, and one-in-five saying it should continue to rise (20%) or be reduced (23%).
More unity is noted on the financial implications of increasing interest rates. A firm majority say that the rise in rates will cause them more financial pain over the coming months. At least half of Canadians across all income levels say this. Approaching half of Canadians (46%) say they are worse off now than they were at the same time last year when it comes to their own finances. This represents a 12-year high. Half (51%) say it is difficult to feed their household, a proportion that has persisted throughout 2022. This number rises to seven-in-ten (68%) among those with household incomes below $50,000.
Moreover, ahead of Thanksgiving and the holiday season, two-in-five Canadians (40%) say they are delaying or cancelling travel plans due to financial concerns.