Almost half of Canadians are doing worse financially than the previous year: survey
By Alexandra Mae Jones
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2022-06-24 (CTV Network) — As inflation rates soar to the highest they’ve been in Canada in forty years, nearly half of Canadians say that right now, they’re doing worse financially than they were at this time last year. A further third say they expect things to get even 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 surveyed more than 5,000 Canadian adults between June 7 and June 13 on their financial standing and struggles. The results shed light on the plight Canadians are facing coast to coast. Currently, inflation is at a staggering 7.7 per cent higher than last year, according to Statistics Canada. The inflation rate hasn’t been this high since 1983, the year that Canada Day replaced Dominion Day. TRENDING DOWN The percentage of Canadians answering that they are worse off financially now than a year ago has been increasing steadily over the last few years. In 2018, only 29 per cent of Canadians said they were doing worse than the previous year. That number climbed to 32 per cent in the first quarter of 2020, then to 45 per cent in the second quarter of 2022. It’s now the highest that it has been since ARI started tracking this specific question in 2010. At the same time, the number of Canadians who said they were doing the same as a year ago plummeted, going from 54 per cent in 2018, to 44 per cent in 2020, to 36 per cent in the second quarter of 2022. Interestingly, the percentage of Canadians who say they are doing better than the previous year jumped to 23 per cent in 2020, after years of hovering around 13-14 per cent. That number is now at 17 per cent. When these results are broken down into the household income of the respondents, those who are in the upper echelons of income, making more than $200,000 annually, were much more likely to report that they were doing better than last year financially, at 26 per cent, and the least likely to report that they were doing worse, at 30 per cent. On the other end of the scale, those making less than $25,000 per year were more likely to say they were worse off this year, at 51 per cent, and less likely to say they were doing better than last year, at 15 per cent — underlining how the rich are hurt less by shifts such as inflation, and the poor keep getting poorer as rising costs hit their wallets. Only one in five Canadians said they expected things to improve a year from now, while a third anticipated things to get even worse. “Residents in Saskatchewan voice the most pessimism and least optimism on this question,” the report stated. COST OF LIVING IS EXORBITANT FOR MANY Concerns about the cost of simply living is the one that consumes the time and energy of most Canadians, with food, housing and bills driving a huge amount of financial worries across the country. When asked what the top provincial issues were, with respondents being able to choose up to three options, “cost of living/inflation” was overwhelmingly the most popular selection, with 63 per cent of respondents selecting it as a major issue. Health care and housing affordability took second and third place at 52 per cent and 31 per cent respectively, with climate change and the environment coming in at fourth with 26 per cent. “Some regions of the country are under more economic stress than others,” the report stated. “In Atlantic Canada, the cost of living was already higher than most other parts of the country last year. And Newfoundland and Labrador, Nova Scotia, and New Brunswick have experienced higher rates of inflation than other provinces, alongside Manitoba and British Columbia.” When it comes to the country as a whole, more than half of those who rented said that it’s difficult to afford their rent. For homeowners, monthly mortgage payments are on the rise after a series of interest rate increase by the Bank of Canada. One quarter of Canadians with a mortgage say prices have already gone up, while another half said they anticipate a price jump. Two thirds say that if their payments increased by $300 a month, they might not be able to afford it anymore. “The challenge for many, as pandemic-era supports are removed, and some struggle with repayment of the CERB they received, is to avoid debt creation,” the report stated, noting that many Canadians are already struggling with debt. Two in five Canadians said they had credit card debt. Of those who scored high on the ARI Economic Stress Index and were classified as “struggling” on that index, 62 per cent had credit card debt, and three-in-five of this group said it would take them more than a year to pay it off. The Economic Stress Index, created in January, looks at core costs related to quality of life, such as debt, housing and household food costs, as well as the respondents’ anxieties and assessments of their own finances, to map out who is having a harder time. There are four categories: struggling, uncomfortable, comfortable, and thriving. The proportion of those who are “thriving” has dropped six points since May, while the number of those who “struggling” has risen three points in that time period. Some good news is that 29 per cent of Canadians fit into the “comfortable” category compared to 26 per cent in May. “A majority in each of the Atlantic provinces fall under the Struggling or Uncomfortable categories,” the report stated, with 55 per cent in Nova Scotia and 64 per cent in Newfoundland and Labrador falling into one of these two categories. Across the country, in most provinces, more than half of the respondents fell into the one of the bottom two categories, with 64 per cent in Newfoundland and Labrador, 59 per cent in Alberta, 62 per cent in Saskatchewan, 57 per cent in Manitoba, 55 per cent in Nova Scotia and 54 per cent in Ontario. Prince Edward Island was not included in the survey. “Only in Quebec (61 per cent) and B.C. (52 per cent) do more than half fall into the top two categories on the ESI,” the report stated. “Notably, by Statistic Canada’s CPI, those provinces have the lowest cost of living of any province in the country.” The province with the single highest percentage of Canadian respondents deemed to be “thriving” was Quebec, with a whopping 30 per cent. Just over 75 per cent of Canadians said their province had done a poor job of handling inflation. Around one in three Canadians said their costs due to purchasing gas had increased, while just under half stated that those costs had gone down for them because they were consciously avoiding driving and seeking out other forms of transportation to save money. FOOD PRICES LEAVING SOME HUNGRY The report noted that inflation affects some goods more harshly than others. “Food inflation was 10 per cent in May, higher than the 7.7 per cent inflation rate overall,” the report said. Just over half of Canadians surveyed reported struggling to make the grocery bill each month, with the report noting that this is seven points higher than last October. And the lower your tax bracket, the harder it is to put food on the table. Seven out of ten Canadians making less than $25,000 a year said it is difficult to feed themselves and their family, while at least one third of all incomes reported finding it hard to budget for food. One B.C. resident told The Canadian Press that her grocery bill has more than doubled. Food Banks Canada are concerned that more and more children — who make up a third of those who rely on food banks — could be going hungry this summer as school ends and access to school-based food programs is cut off. Earlier this month, NDP leader Jagmeet Singh called out MPs for laughing in the House of Commons after he spoke about Canadians being unable to afford groceries. In a video Singh posted of the incident, laughter can be heard after he states that one in four Canadians are going hungry. “I just mentioned that Canadians are hungry and I hear laughter in the chambers,” Singh said after the Speaker asked him to repeat himself. “They should be ashamed of themselves. Absolutely ashamed.” He stated on social media that those who were laughing were Conservative MPs. TRUST IN INSTITUTIONS Amid rising inflation, the Bank of Canada is meant to keep the impact on Canadians to a minimum through policy adjustments, but Canadian trust in this institution is split, according to the survey. While 46 per cent said they trusted the Bank of Canada, 41 per cent said they did not. When the political leanings of survey respondents were taken into account, the results became more stark: Past supporters of the Conservative party and the People’s Party of Canada were less likely to trust the Bank of Canada, with 59 per cent and 86 per cent indicating this respectively. The Bank of Canada has admitted that it made missteps, and is now playing catch-up as Canada’s economy overheats.
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Matthew Talbotmatthew.talbot@bellmedia.ca
