With the cost of living becoming more expensive every day, most Canadians are adjusting their spending habits— by either cutting back on expensive items, postponing big purchases, borrowing from friends, or pulling from their savings.
According to a recent survey by Statistics Canada, a majority of Canadians—nearly 75 per cent—have had to change their spending habits in order to meet daily expenses due to rising costs, with nearly half opting to delay purchases and more than a quarter resorting to borrowing money from friends and relatives.
The survey—conducted between April 19 and May 1, 2022—found most Canadians are being affected by rising food prices, followed by increasing housing costs and growing transportation costs.
Inflation in Canada peaked at 6.8 per cent in April — the highest since January 1991.
Changing spending habits, increased borrowing, lower savings
According to the survey, nearly half of Canadians reported that they were looking at sales and promotions in order to make their purchases within the budget.
Forty-seven per cent of those surveyed were making adjustments by looking for cheaper alternatives, brands, and items, with 45 per cent delaying any purchases due to the price surge.
In order to meet daily expenses, more than one-quarter (27 per cent) of Canadians have resorted to borrowing from friends or relatives.
The report said that groups borrowing money to meet daily expenses belong to the bottom two household income groups. These groups also included younger individuals (aged 15 to 39), households with one child, and persons with a disability.
With increased borrowing, more Canadians are also finding it difficult to save.
About 24 per cent said that to meet their daily expenses, they had to pull from their savings. Savings had reduced for 29 per cent of the Canadians surveyed, with 19 per cent no longer being able to save.
Housing and rent affordability
The findings from Statistics Canada show that younger Canadians are more likely to feel the pressure of rising house/rent prices than older Canadians.
Both rented and owned accommodation have been on the rise in Canada, making it impossible for first home buyers to own a home.
Meanwhile, more than half (56 per cent) of Canadians are concerned whether they can afford housing or rent.
Shelter prices, including rented and owned accommodation, in Canada, have surged to 7.4 per cent over the year in April 2022— the largest increase since 1983.
More than half (53 per cent) of younger Canadians aged 15 to 29 and 39 per cent of those aged 30 to 39 were twice as likely to be impacted by housing or rent affordability than those above 40 (20 per cent), according to Statistics Canada. Older Canadians were more likely to have purchased and paid off their home and this may have resulted in the huge difference between age groups.
Rising cost in both rental and owning a home also led to many younger adults delaying plans to buy a home or move into a new rental.
Unaffordable food and gas prices
Food from shelves has become more expensive for Canadians. Basic food supplies such as fresh fruits (10 per cent) and vegetables (+8.2 per cent) have seen a surge during the past year.
While rising food prices were a concern for urban residents, transportation was a bigger concern for rural residents.
Among Canadians buying gasoline, 94 per cent said they are very (67 per cent) or somewhat (27 per cent) worried about the rising gasoline prices.
With growing hopes to return to normalcy, rising gas prices has shown an upward, concerning trend. Across all provinces, the average gas prices continue to rise.
