Over a quarter of Canadians are cutting back on essentials like food and housing due to the economic downturn.
According to the MNP Consumer Debt Index survey, 27% of people polled said that they’ve had to let go of some necessary purchases due to rising costs.
Another 46% had to cut back spending on non-essential goods like dining out and entertainment.
“No matter where Canadians turn, there is no reprieve; housing is more expensive, driving a car is more expensive, food is more expensive,” said MNP president Grant Bazian.
“Right now, many Canadian households are trying to adjust their budgets, cutting costs where they can in order to keep up with their monthly bills. But as the cost of living continues to rise – it’s likely to get worse before it gets better – households will have to make increasingly difficult choices about what to cut, and could find themselves piling on debt to make ends meet.”
Approximately 50% also said that if rates continue to climb they will likely face financial disaster. Nearly a quarter of those polled said that even a one percent interest rate hike will put them over the edge.
“Right now, many Canadian households are trying to adjust their budgets, cutting costs where they can in order to keep up with their monthly bills,” Bazian said.
“But as the cost of living continues to rise – it’s likely to get worse before it gets better – households will have to make increasingly difficult choices about what to cut, and could find themselves piling on debt to make ends meet.”
The survey corroborates findings by other polling firms which indicate more Canadians are struggling in today’s economy than before the pandemic.
An Ipsos poll published in June found that 72% of households were worried that they would not be able to feed their families due to inflation.
“Younger Canadians are looking at a situation that they haven’t seen in their lifetime,” said vice-president of public affairs at Ipsos Gregory Jack.
“You can see why all of this is kind of piling on all at the same time. This is a unique period in Canadian history. I mean, we haven’t had inflation this high in over 30 years.”
On Wednesday, the Bank of Canada announced it is hiking interest rates to 2.5%, a 100 basis points increase – the largest one-time hike since 1998.
