More Canadians than ever are struggling to afford holiday spending due to the rising cost of living.
BMO’s Real Financial Progress Index found that 77% of those surveyed said their Christmas shopping has been impacted by growing inflation.
Canadians are also less confident in their financial situation, according to the report. A total of 69% of people surveyed reported being confident in their finances – a 6% drop when compared to last year.
In order to save some money 37% of Canadians are buying less expensive presents, 33% are cutting back on purchases and 28% plan on giving out fewer gifts.
“Given the highest inflation in four decades and the fastest interest rate increases in three decades, it’s not surprising that Canadian families, especially younger ones, are feeling substantial strain on their finances and well-being,” said senior economist Sal Guatieri.
“The relatively good news is that policy rates are expected to stabilize in 2023 as inflation slows, setting the stage for potentially lower borrowing costs in 2024.”
Almost two thirds – 63% – of Canadians are also putting off making major purchases like a new vehicle or buying a house.
Anxiety over finances is also high with 51% of people fretting about their credit card debt.
On top of inflation, Canadians have to deal with incoming tax hikes.
The Canadian Federation of Independent Businesses reported last week that increases to Canada Pension Plan and Employment Insurance premiums will see Canadians take home $305 less in pay beginning next year.
“The maximum additional amount that an employee will pay in EI and CPP contributions is $304.71. It may not seem like a lot, but $300 can cost one family a trip to the grocery store or pay for their transportation or utility bills. Payroll tax increases will hit Canadians at a time when most are already seeing their cost of living quickly increase,” said CFIB president Dan Kelly.
“The hikes will also affect small businesses. With rising input costs, staggering labour shortages and a potential recession, the economy is already in a bad shape. At minimum, the government should be pressing pause until inflation is under control.”