Monthly price increases in Canada have soared this past year and with them, have come decreased rates of spending.
Since July 2021, prices have risen by 7.6 per cent — much higher than the Bank of Canada’s target two per cent.
According to a recent poll by the Angus Reid Institute, four in five Canadians say they have cut their spending in recent months. Of the 2,279 adults surveyed, over half of those making cuts said they were reducing discretionary spending and just under half said they were delaying a major purchase.
This number has increased since February when the same poll found six per cent fewer Canadians reported a tightening of their spending habits.
With pricing trends generally moving in an upwards trajectory, president of the Angus Reid Institute Shachi Kurl says people are seeing their savings chewed up in line with the rising cost of goods and services.
“The mindset is very much at this stage, pivoting to a place of it's time to tighten our belts, it's time to service debt, it's time to pay off the things that are going to cost more to pay off today than they might have in the last five years,” Kurl said.
Across Canada, the levels of penny-pinching vary depending on which region of the province you land in. In Saskatchewan and Atlantic Canada, at least half of those surveyed said they would use a sudden gift of $5,000 to pay off debt. This compares to only 36 per cent in B.C. and Ontario, and 33 per cent in Quebec.
Additionally, people in Saskatchewan, Atlantic Canada and Alberta are more likely to say they’ve been cutting back on spending recently than respondents from other provinces.
“There is generally, a greater level of economic pessimism or caution that we tend to see baked into mindsets in Alberta and Saskatchewan,” Kurl said. “That may be because the economy's a little bit more driven by commodity prices and what's happening in the resource industry.”
Meanwhile, in Atlantic Canada, Kurl says the higher proportion of retirees living on fixed incomes in a somewhat isolated part of the country, may have something to do with its respondents' feelings about spending and debt.
Some of Canadians’ anger about inflation appears to be directed towards grocery stores, according to the survey. Almost four in five Canadians say grocery stores are boosting their profits by taking advantage of inflation rates. Only seven per cent of respondents credit the increased margins to good management by grocery chains.
Regardless of where Canadians are placing blame, the rising inflation rate has brought good news to some and bad news to others.
Charities are bearing a large brunt of Canadians’ spending cuts, with approximately a quarter of those surveyed saying they’ve trimmed back their donations. But the climate is experiencing a moment of relief as two in five Canadians report driving less.
Overall, among those surveyed, the group of females aged 18 to 34 reported being the most stressed about money — 10 per cent more than the 76 per cent average. According to Kurl, this stress is a sign of the times.
“We're seeing rents increasing [and] people who are on the precipice of a mortgage renewal looking at significantly higher rates,” she said.
“All of these things are combining to lead to a different kind of anxiety that we haven't seen in the past.”