As inflation rates in Canada soar to their highest levels in forty years, nearly half of Canadians say they are worse off financially now than they were at this time last year.
Another third expect things to get worse in the coming year, the largest number of people to answer this way in more than a decade.
The numbers come from a new Angus Reid Institute (ARI) survey released Friday, which polled more than 5,000 Canadian adults about their financial health and struggles between June 7 and 13.
The findings shed light on the plight Canadians are facing from coast to coast.
According to Statistics Canada, inflation is currently a staggering 7.7 percent higher than last year. The rate of inflation has not been this high since 1983, the year Canada Day replaced Dominion Day.
The percentage of Canadians who respond that they are worse off financially than they were a year ago has steadily increased in recent years. In 2018, just 29 percent of Canadians said they were worse off than the year before. That number rose to 32 percent in the first quarter of 2020 and 45 percent in the second quarter of 2022.
It is now the highest since ARI began tracking that particular question in 2010.
At the same time, the number of Canadians who said they were doing the same thing as a year ago fell from 54 percent in 2018 to 44 percent in 2020 to 36 percent in the second quarter of 2022.
Interestingly, the percentage of Canadians who say they are doing better than the year before rose to 23 percent in 2020 after years of hovering between 13 and 14 percent. That number now stands at 17 percent.
When these results are broken down by respondents’ household income, those in the upper income brackets and earning more than $200,000 per year were much more likely, at 26 percent, to say they were better off financially than they were last year, and those least likely to report feeling worse at 30 percent.
At the other end of the scale, those making less than $25,000 a year were 51 percent more likely to say they were worse off this year and 15 percent less likely to say they were better off than last year – He underscores how the rich are less harmed by changes like inflation and the poor become poorer and poorer as rising costs hit their wallets.
Just one in five Canadians said they expected things to get better in a year’s time, while a third expected things to get worse.
“Saskatchewan residents are the most pessimistic and least optimistic on this issue,” says the report.
THE COST OF LIVING IS EXORBITANT FOR MANY
Worries about the expense of simple living are those that consume most Canadians’ time and energy, with food, shelter and bills driving a large amount of financial worries across the country.
When asked what the top issues were in the provinces, with respondents able to select up to three options, “cost of living/inflation” was overwhelmingly the most popular choice, with 63 percent of respondents selecting it as an important issue.
Affordability of healthcare and housing ranked second and third at 52 percent and 31 percent, respectively, while climate change and the environment ranked fourth at 26 percent.
“Some regions of the country are under greater economic stress than others,” the report says. “The cost of living in Atlantic Canada was already higher than in most other parts of the country for the past year. And Newfoundland and Labrador, Nova Scotia and New Brunswick, along with Manitoba and British Columbia, have experienced higher rates of inflation than other provinces.”
Across the country as a whole, more than half of tenants said it was difficult to afford their rent.
For homeowners, monthly mortgage payments are rising after a series of rate hikes by the Bank of Canada. A quarter of Canadians with a mortgage say prices have already gone up, while the other half say they expect prices to go up. Two-thirds say they might not be able to afford it if their payments increased by $300 a month.
“The challenge for many, as pandemic-era support is removed and some struggling to repay the CERBs they have received, is to avoid incurring debt,” the report said, noting that many Canadians are already in debt have to fight.
Two in five Canadians say they have credit card debt.
Of those who scored high on the ARI Economic Stress Index and were classified as “difficult” on that index, 62 percent had credit card debt, and three in five of that group said it would take them more than a year to clear it pay it off.
The Economic Stress Index, produced in January, examines the core costs associated with quality of life, such as debt, housing and household food costs, as well as respondents’ fears and assessments of their own finances to identify who is having a harder time.
There are four categories: struggling, uncomfortable, comfortable, and thriving. The proportion of those who are “thriving” has fallen six points since May, while those who are “struggling” have risen by three points over the period. The good news is that 29 percent of Canadians fit into the comfortable category, compared to 26 percent in May.
“A majority in each of the Atlantic provinces fall into the ‘debilitating’ or ‘uncomfortable’ categories,” the report said, with 55 percent in Nova Scotia and 64 percent in Newfoundland and Labrador falling into one of those two categories.
Across the country, in most provinces, more than half of respondents fell 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 percent in Ontario. Prince Edward Island was not included in the survey.
“Only in Quebec (61 percent) and BC (52 percent) do more than half fall into the top two categories of the ESI,” the report says, living in any province in the country.”
The province with the highest single percentage of Canadian respondents classified as “thriving” was Quebec at a whopping 30 percent.
Just over 75 percent of Canadians say their province has done a poor job of dealing with inflation.
About one in three Canadians say their costs have increased as a result of buying gas, while just under half say these costs have decreased for them because they consciously stopped driving and chose other modes of transportation to save money.
FOOD PRICES LEAVE SOME HUNGRY
The report found that inflation affects some commodities more than others.
“Food inflation was 10 percent in May, higher than the overall inflation rate of 7.7 percent,” the report said.
Just over half of the Canadians surveyed said they struggled to pay the grocery bill each month, with the report noting that that’s seven points up from last October.
And the lower your tax bracket, the harder it is to get food on the table. Seven in 10 Canadians earning less than $25,000 a year said they found it difficult to support themselves and their families, while at least a third of all income earners reported that budgeting for groceries was difficult.
A BC resident told The Canadian Press that her grocery bill has more than doubled. Food Banks Canada are concerned that increasing numbers of children – who make up a third of those who rely on food banks – could starve this summer as schools end and access to school-based meal programs is shut down.
Earlier this month, NDP leader Jagmeet Singh called on MPs to laugh in the House of Commons after speaking about Canadians being unable to afford food. Laughter can be heard in a video Singh posted of the incident after he explained that one in four Canadians is starving.
“I just mentioned that Canadians are hungry and I hear laughter in the chambers,” Singh said after the speaker asked him to repeat himself. “You should be ashamed. Absolutely ashamed.” He explained on social media that those who laughed were Conservative MPs.
TRUST IN INSTITUTIONS
As inflation rises, the Bank of Canada is expected to minimize the impact on Canadians through policy adjustments, but Canadian confidence in the institution is divided, according to the survey. While 46 percent said they trust the Bank of Canada, 41 percent said they didn’t.
Adjusting for the political leanings of the survey participants, 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, 59 percent and 86 percent said so, respectively.
The Bank of Canada has admitted it has made mistakes and is now catching up as Canada’s economy is overheating.
Read Also :