News
Canadians are becoming more concerned about their finances
Reviews and recommendations are impartial and products are independently selected. Postmedia may earn an affiliate commission for purchases made through links on this page.
Article content
More Bank of Canada interest rate cuts cannot come soon enough for a growing number of people who say they are worse off financially on a number of fronts, a new survey says.
Fifty-five percent of Canadians indicated they are concerned about their day-to-day personal and family finances, which is the highest reading recorded by Maru Public Opinion since it began its Family Outlook Index four years ago.
Article content
The number of people concerned about their personal finances has seen a steady increase since the beginning of 2021, when 40 percent of people had such concerns.
John Wright, executive vice-president of Maru Public Opinion, links the measure’s inexorable increase to the acceleration of inflationwhich rose from 3.1 percent in June 2021 to a peak of 8.1 percent a year later.
“It’s something people can’t shake,” he said.
Maru had even more bad news. For example, 28 percent of Canadians said they were worse off financially in May, up from 25 percent the previous month and 23 percent at the start of the year. And a record number of people said they are struggling to make ends meet – 43% compared with 37% in March – according to the survey of 1,500 Canadian adults between May 31 and June 3.
“During COVID, a lot of people didn’t have the expenses they had. Cars were parked on the sidewalks. They were working from home. It was bad with the virus, but really good with finances,” Wright said. “In the last six to eight months, they started to realize that the cost of living was much higher than they expected. They are significantly in debt.”
Article content
Maru’s latest survey was conducted days before the Bank of Canada made its first interest rate cut in four years. On June 5, the central bank cut its reference interest rate by 25 basis points to 4.75%, compared to the maximum recorded in more than two decades, of 5%.
Wright believes more cuts will be needed before people change their financial outlook.
“I know people will be pleased, but at 25 basis points, it’s not going to have a huge impact on people’s lives,” he said.
All this personal “pocket pessimism” has dragged down the Household Outlook Index, after it had started to rise from its historic low at the end of last year.
The index fell to 85 in May from 86 in April. The base number of the index is 100. A result above 100 indicates optimism and below 100, pessimism. Maru compiles its household index every month, asking a panel of people a series of questions about the outlook for the economy over the next 60 days.
Recommended by Editorial
-
Weak economy means Bank of Canada has to keep cutting rates
-
Bank of Canada saw rate cuts 3 more times in 2024
With regard to the economy, 34 percent consider it to be on the right track, an increase of three percentage points compared to the previous survey. That brought the reading back to where it was two months ago, Wright said, noting that a significant number of people — 66 percent — still believe the economy is on the wrong track.
“On the national front, nothing has changed, but on the personal front, people continue to fight,” he said.
• Email: gmvsuhanic@postmedia.com
Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your favorites and sign up for our newsletters here.
Share this article on your social network