Canadians are being forced to make “difficult sacrifices” due to high living costs to make ends meet.
As inflation continues to weigh heavily on households, more than half of Canadians are adjusting their spending habits to make ends meet, with many resorting to sharing expenses and cutting back on essentials.
According to the latest MNP Consumer Debt Index, 28% of Canadians have resorted to eating less to save money.
Almost one-third of Canadians have turned to bill-splitting techniques like carpooling, buying in bulk, sharing subscriptions and childcare, and living with others.
“These measures reflect the harsh reality of soaring living costs, compelling Canadians to find new ways to save,” said Grant Bazian, president of MNP Ltd. “It’s particularly concerning that nearly three in ten report cutting back on food to make ends meet.”
The number of Calgarians resorting to food banks as they prepared for Thanksgiving doubled since two years ago.
A previous study showed that food bank usage surged 30% nationwide last year.
The majority of Canadians have cut back on discretionary spending.
Over half (51%) of Canadians have tried to save money by grocery shopping more strategically, while 48% are actively trying to avoid impulse purchases. Additionally, 44% of Canadians said they have stopped going to restaurants or ordering takeout.
These cost-saving measures are more common among Canadians aged 18 to 34 years old and those living in Alberta and British Columbia.
Cohabitation is also most common among younger Canadians, with British Columbians and low-income Canadians being the most affected. 13% said they were living with friends, partners, or family members or seeking additional roommates to save money.
“We’re witnessing a bill-splitting boom as Canadians adapt to the high cost of living,” Bazian noted.
He emphasized that the cost-saving strategies showcase resourcefulness and highlight the severe financial pressures many face.
Despite the cutbacks and sacrifices Canadians are making, the report highlighted that the recent decline in interest rates has seen some report relief and improvements in their financial situations.
Canada’s inflation rate rose at its slowest pace in over three and a half years in September, reaching 1.6%.
However, rent and food prices have continued to outpace overall inflation, rising by 21% and 20.7%, respectively, between Sep. 2021 and 2024. Overall inflation has risen 12.7% during the three years.
The Bank of Canada has already cut interest rates three times this year. Economists have predicted a 50 basis points rate cut on Oct. 23 following the inflationary decrease.
MNP’s report highlighted that more than 40% of Canadians say they are $200 or less away from financial insolvency, the lowest proportion since Sep. 2018.
The MNP Consumer Debt Index survey was conducted by Ipsos between Sept. 6 and Sept. 11, 2024, and polled 2,000 Canadians aged 18 and over.
