Sep 29, 2022
Rising cost of essential goods is greatest debt contributor for Canadians, survey finds
1 in 4 are holding off on RRSP/TFSA contributions: Angus Reid Institute
According to the survey of 2,008 Canadians, which was released by BDO Canada Ltd. on Thursday and conducted by the Angus Reid Group, 84 per cent stated rising costs as the biggest contributor to their debt.
One-third of respondents (35 per cent) stated they are having a hard time feeding themselves and their family members, a 12 per cent increase in comparison to 2021.
Last week, Statistics Canada reported food prices rose at its fastest pace in August since 1981. The agency found the cost of food increased 10.8 per cent compared to a year ago.
Many Canadians have also changed their grocery store habits, with a survey by Dalhousie University’s Agri-Food Analytics Lab finding that the majority of individuals are making lifestyle changes in order to manage soaring costs.
The report said the top ways Canadians are looking to cut their grocery bills are by using loyalty programs (33.7 per cent), reading weekly flyers (32.1 per cent) and using more coupons (23.9 per cent.)
However, food isn’t the only essential service Canadians are struggling to afford.
Over half of surveyed individuals (52 per cent) say they’re finding it difficult to pay for transportation, a 17 per cent jump from a year ago.
“With inflation and rising costs, affordability challenges have returned to, and in some cases, surpassed pre-pandemic levels,” says Nancy Snedden, national leader of the BDO Debt Solutions practice, in a press release.
“It’s concerning to see that Canadians are experiencing more financial difficulties today compared with the last three years.”
RETIREMENT SAVINGS SLASHED
The rising cost of essential goods has also affected how much Canadians can put away every month for retirement.
The majority of respondents (71 per cent) say saving for retirement is a challenge, while 62 per cent say they are saving less in the past year, or not at all, and it’s mainly due to the higher cost of living.
Canadians are worried about how this could affect their retirement in the long-term, with 64 per cent saying they’re not on track to have enough savings.
INFLATION WEIGHS ON CANADIANS
Most individuals say that inflation is weighing on their financial situation.
Three-out-of-four Canadians (78 per cent) say that their personal finances have gotten worse due to higher inflation, and over half (54 per cent) say they’re living paycheque-to-paycheque.
Statistics Canada reported overall inflation eased for a second straight month in August amid lower gasoline prices.
The consumer price index rose seven per cent compared to a year ago, which was down from 7.6 per cent in July.
In partnership with BDO Canada, Angus Reid conducted the fifth annual online survey from August 5 to August 11, 2022, among a representative randomized sample of 2,008 Canadians age 18+ who are members of the Angus Reid Forum. For comparison purposes only, a probability sample of this size would yield a margin of error of +/- 2.2%, 19 times of out 20. Discrepancies in or between totals are due to rounding. Complete results of the 2022 BDO Affordability Index are available through the contact below.