The Christmas shopping season may be underway, but the Grinch of inflation continues to dampen holiday cheer.
New data from the non-profit Angus Reid Institute shows Canadians find little reprieve from stabilized inflation.
The sting of a second year of high consumer prices affecting everything from vitamins to bread and rent has majorities saying they will spend less on holiday preparations this year (55%) and have cut back on discretionary spending overall in recent months (61%). These percentages are nearly identical to last year.
For seven quarters in a row, more than two-in-five Canadians report feeling left behind as the cost of living rises. Currently, 46% feel they aren’t keeping up financially, nearly quadruple the number who say they are getting ahead (12%).
Since the summer, a majority of Canadians have reported they find it difficult to feed their family as prices at the grocery store continue to rise faster than other elements of Statistics Canada’s Consumer Price Index.
The Bank of Canada may be relieved by the recent deceleration of inflation as it considers its next policy rate decision on December 6, but Canadians appear more discouraged than not as they look ahead to 2024. Two-in-five (40%) expect to end next year in a similar financial position, while one-third (33%) see their circumstances worsening. Fewer than one-in-five (18%) express optimism the next 12 months will brighten their financial picture.
The cost of living remains the top issue in the eyes of Canadians. Three-in-five (61%) select it as the top issue facing the country, ahead of health care (46%), housing affordability (32%), climate change (24%) and the economy more broadly (21%).
Concerns about the cost of living vary little across regions, ranging from 57% in BC and Ontario to 66% in Quebec.
Three-in-ten (31%) Canadians are struggling according to Angus Reid’s Economic Stress Index. One-quarter (25%) are uncomfortable, while equally-sized groups are comfortable (22%) and thriving (22%). Nearly four-in-five (78%) of the struggling say they’ll spend less on holiday preparations this year, more than the uncomfortable (64%), comfortable (47%) and thriving (20%).
Canadians say the largest way they’re coping is by reducing their discretionary spending (61%), followed by spending less on Christmas gifts and hosting (55%). Also, 46% are delaying a major purchase, 38% are giving less to charity and 35% are scaling back travel plans.
The only major change is in driving. Whereas 38% of Canadians said in December 2022 they were driving less, now only 28% say the same.
Prior to the fall economic update, the federal government claimed it was pinching pennies also. Then Ottawa announced $20 billion of new spending, though many of those measures are aimed at addressing cost of living concerns. Conservative leader Pierre Poilievre was quick to point out a Scotiabank report found spending by provincial and federal governments drove the Bank of Canada’s policy rate two percentage points higher than it would have otherwise.
Federal spending and the deficit made the top three concerns for many residents from Saskatchewan (30%) and Alberta (23%), but least in BC (14%).
