1 in 3 Canadians Report Being in ‘Bad’ or ‘Terrible’ Financial Shape: Survey

People shop at a grocery store in Montreal on Nov. 16, 2022. The Canadian Press/Graham Hughes

One-in-three Canadians say they are in rough financial shape, and two-in-five are dipping into their savings to get by, according to a recent survey by the Angus Reid Institute.

“More than a year into a stubborn and persistent cost-of-living crisis, a considerable number of Canadians have progressed from belt-tightening on spending to drawing on existing savings to make ends meet,” the institute said in an April 6 news release.

Inflation reached peaks in 2022 not seen in Canada since the 1980s, Angus Reid said, putting pressure on household budgets, especially regarding buying groceries. The number of Canadians describing themselves as struggling financially is at the highest level since the COVID-19 pandemic began in 2020, according to the survey results.

Two-thirds of Canadians report that they are cutting back on “discretionary spending,” 14 points higher than what the survey found around the same time last year.

Another 40 percent say that due to recent challenges, they are withdrawing money from accounts they try to leave untouched, and 35 percent of those surveyed said they deferred a contribution to their tax-free savings account or retirement RRSP. That has gone up from 22 percent in February 2022.

Another one-in-ten, or 13 percent, reported that financially they were so tapped they had to borrow money from friends and family, 11 percent reported they sold assets, and 9 percent said they looked into getting a bank loan.

“Fully one-in-three (34 percent) Canadians say they’re in either “bad” or “terrible” shape financially. This represents a six-point increase from last July. Those individuals continue to struggle with food costs, for which inflation remains significantly higher at approximately 10 per cent,” said Angus Reid.

Among those Canadians with a household income of less than $50,000 per year, more than half (54 percent) said they are in poor or terrible financial condition. In households with a household income between $50,000 and $99,999, only 33 percent said their finances are poor or terrible.

According to the survey, among those who reported being in “terrible shape” financially, 94 percent said it was difficult to feed their household. Among the group that described themselves as in “bad shape,” 80 percent said the same thing about food costs.

Budget

Angus Reid noted that the federal government’s recently tabled budget offered a one-time grocery rebate. According to an an example offered by the government, a single individual earning $32,000 could receive a rebate of $234, on top of money from the Canada Workers Benefit and GST Credit.

The 2023 budget also offered an example of a couple earning $38,000, with two young children, receiving a grocery rebate of roughly $467, on top of other benefits.

The survey asked if workers received a raise last year. More than half (55 percent) said they received a raise in the last 12 months. However, 45 percent, including many part-time workers, had not receive a raise, especially workers employed in sales, retail, and hospitality industries.

As for how they were coping with the rising cost of living, with 43 percent of respondents stated they had delayed a major purchase of a home, car, or large appliance.

The survey was conducted from a pool of 1,600 random adult Canadians between March 30 and 31.