Rising prices make it more difficult to cover daily expenses, most Canadians cry out
Nearly half, or 45 per cent, of Canadians say rising prices are “greatly impacting” their ability to meet day-to-day expenses, which is 12 percentage points higher than two years ago, according to a Statistics Canada study.
The feeling was most prevalent among young adults, who were more likely to report daily financial stresses and expectations to obtain food from a food bank. Among those who said they were stressed about money “most days,” just one in five people reported a high level of life satisfaction.
The study, which compiled responses from Canadians gathered in the spring, was published on Thursday.
Children were also an indicator of greater financial stress. Fifty-five per cent of households with kids reported day-to-day pressure, compared to 37 per cent of lone-occupant houses.
Housing affordability was also a common thread among respondents, many of whom reported elevated fears they would not make enough to buy a home or afford rent.
About four in 10 people said they were “very concerned” about being able to purchase a house or pay rent monthly. In 2022, three in 10 people felt that way.
StatCan says prolonged feelings of financial instability can result in widespread mental health impacts. One in three people described “most days” as “a bit” or “extremely” stressful because of money issues. That figure remained unchanged from two years ago.
Loans on the rise
Canadians are generally carrying more debt, according to another StatCan study published Thursday.
During COVID-19 lockdowns, many were able to build their savings and cut down on debt as businesses deemed non-essential closed and officials limited travel.
But high inflation, among other factors, has eaten through that reserve, and Canadians’ debt has increased since 2022.
Non-mortgage loans have reached $553.1 billion in the third quarter of 2023, up 13.7 per cent from the first quarter of 2020.
Passenger vehicle loans saw serious increases as demand for vehicles continued despite pandemic-era manufacturing woes. Prices on those vehicles rose 16.3 from the start of 2020 to the third quarter of 2023.
Passenger vehicle and credit card loans saw the highest rates of arrears, at around 0.6 and 0.9 per cent respectively by the end of Q3 2023, meaning a person was late to provide debt payments by 90 days or more.
As for mortgage loans, arrears were still below pre-pandemic levels. However, StatCan says many households have yet to renew their mortgages.
“Around 2.2 million mortgages, or 45 per cent of all outstanding mortgages in Canada (over $675 billion), will face an interest rate shock in 2024 and 2025,” predicted the agency, citing data from the Canadian Mortgage and Housing Corporation.
This article was first reported by CTV News
