Holiday hurt: Inflation realities deflate Christmas shopping plans, two-in-five cut back on charitable giving

Holiday hurt: Inflation realities deflate Christmas shopping plans, two-in-five cut back on charitable giving

Half say they’re worse off now than this time last year when it comes to personal finances


December 5, 2022 – As snow blankets most of the country, Canadians are simultaneously trying to dig out from under the inflation that has burdened them for most of the year. With holiday preparations underway, many are cutting back on seasonal spending.

New data from the non-profit Angus Reid Institute finds more than half of Canadians (56%) report that they will be spending less on Christmas, including presents and entertaining.

These decisions are most prominent among those with lower income levels. Approximately three-in-five (61%) of those earning less than $50,000 annually say they are spending less on presents and decorating this year. Fewer than half, but still 45 per cent of those whose household incomes are above $200,000 say the same.

These same financial challenges will likely impact many struggling charities this holiday season. Approaching two-in-five (37%) say they have scaled back charitable giving in recent months, including two-in-five (41%) of those over the age of 54, an age group that has historically donated more.

All this comes at the end of one of the most financially difficult years in recent memory for many Canadians. Half (50%) say they are financially worse off now than they were at this time last year, the highest level seen in ARI’s tracking dating back to 2010. Few (13%) have seen their financial picture brighten in the last 12 months.

There is not much in the way of personal financial optimism among Canadians as they look ahead to 2023, either. One-in-five (20%) believe their economic situation will improve in the next 12 months. Twice as many (41%) believe they’ll tread water, while three-in-ten (31%) see their finances deteriorating.

Chart, line chart Description automatically generated

More Key Findings:

  • Despite the province cutting residents a $500 affordability cheque in the fall, three-in-five (59%) in Saskatchewan say they are in worse financial shape now than they were a year ago, the highest proportion in the country.
  • Two-thirds of Canadians (64%) say they have cut back on discretionary spending in recent months, up from 57 per cent in August. Overall, approaching nine-in-ten (87%) say they have cut back spending in some way recently, up from 80 per cent in August.

 

About ARI

The Angus Reid Institute (ARI) was founded in October 2014 by pollster and sociologist, Dr. Angus Reid. ARI is a national, not-for-profit, non-partisan public opinion research foundation established to advance education by commissioning, conducting and disseminating to the public accessible and impartial statistical data, research and policy analysis on economics, political science, philanthropy, public administration, domestic and international affairs and other socio-economic issues of importance to Canada and its world.

Note: Because its small population precludes drawing discrete samples over multiple waves, data on Prince Edward Island is not released.

 

INDEX:

Part One: Inflation squeezes holiday spending

  • The season of giving?: Costs up for charities, donations down

Part Two: A difficult financial year

  • Half of Canadians say they are worse off financially this year than last

  • Optimism drops heading into new year

 

Part One: Inflation squeezes holiday spending, charitable giving

After a year-long battle by the Bank of Canada against inflation, there are signs the tide is turning. Price growth for food has slowed, while gas prices are down from mid-year peaks. Still, Canadians can be forgiven if they do not yet celebrate victory. Consumers will be holiday shopping with increased prices all around them. In October, Statistics Canada’s Consumer Price Index still showed a 6.9 per cent increase over the same time last year.

Though inflation may be burning less intensely, Canadians are still feeling the blisters from a year of scorching prices. Approaching nine-in-ten (87%) say they have cut back spending in some way in recent months, up from 80 per cent in August. Two-thirds (64%) have cut back on discretionary spending, while significant numbers have delayed a major purchase (44%), cut back on trips in the car (38%), scaled back charitable giving (37%) or cancelled vacation plans (37%).

Notably, as most Canadians prepare to celebrate Christmas, a majority (56%) say they’ve reduced the amount of Christmas spending they are doing this year, cutting back on decorations, entertainment or presents:

Households earning six figures or more annually are less likely to be trimming holiday spending than lower income households, but more than two-in-five in all income brackets say they’ll be more Scrooge-like in their Christmas spending this season:

The season of giving?: Costs up for charities, donations down

For many, charitable giving appears to be another casualty of this inflationary environment. This, as charities across the country are struggling with their own rising costs, and depressed donations.

Older Canadians are more likely to say they are donating less to cut back on spending in recent months. Two-in-five of those over the age of 54 say they have been cutting back on charitable donations. This is especially notable because older Canadians are much more likely to give, and give more, than younger generations.

The highest earning Canadians are the least likely to be scaling back donations to charitable causes at one-third (32%). However, the likelihood of curbing donations varies little across income demographics:

Part Two: A difficult financial year

Half of Canadians say they are worse off financially this year than last

A year of high inflation has taken its toll on Canadians. Half say they are worse off financially than they were at this time last year, a rate not seen in more than a decade of tracking by the Angus Reid Institute. Few (13%) say they are better off:

At least half in all provinces except Quebec say their financial situation has deteriorated over the last year. There are more with negative financial self-assessments in Saskatchewan (59%) and Nova Scotia (57%) than other provinces. The federal government announced a $4.6 billion relief package for low income Canadians and many provincial governments have announced or delivered inflation relief programs over the past four months, but the results appear modest at this point:

Younger Canadians are more likely than older ones to believe themselves to be in a better financial position over the last year. One-in-four (24%) 18- to 34-year-olds say they are better off than they were last year at this time. Nearly all (92%) those aged 55 or older see themselves treading financial water, or heading further under, after the last 12 months (see detailed tables).

Higher income households are more positive in their self-financial assessment. However, pluralities of those earning $100,000 to $200,000 annually, and two-in-five in the highest income households, say their financial picture has worsened. At least half in all income brackets of less than $100,000 say the last year has had a negative impact on their finances:

Optimism drops heading into new year

Canadians’ financial optimism has also declined over the last two years. One-in-five believe they will be financially better off next year. This represents a continuing downward trend compared to 2020, as Canadians foresaw a brighter financial picture emerging from the first year of the COVID-19 pandemic. A plurality (41%) believes they’ll be in the same financial position at this time next year. Three-in-ten (31%) are pessimistic about their economic outlook for 2023, an eight-point increase compared to 2020 and a two-point jump year-over-year:

Financial pessimism is highest in Nova Scotia (43%), Saskatchewan (42%) and New Brunswick (41%), while optimism is slightly higher in Ontario (23%) and Newfoundland and Labrador (23%) compared to the rest of the country:

Survey Methodology:

The Angus Reid Institute conducted an online survey from Nov. 28-30, 2022 among a representative randomized sample of 2,774 Canadian adults who are members of Angus Reid Forum. For comparison purposes only, a probability sample of this size would carry a margin of error of +/- 2 percentage points, 19 times out of 20. Discrepancies in or between totals are due to rounding. The survey was self-commissioned and paid for by ARI.

For detailed results by age, gender, region, education, and other demographics, click here.

To read the full report, including detailed tables and methodology, click here

To read the questionnaire in English and French, click here.

Image – Colin Lloyd/Unsplash

MEDIA CONTACT:

Shachi Kurl, President: 604.908.1693 shachi.kurl@angusreid.org @shachikurl

Dave Korzinski, Research Director: 250.899.0821 dave.korzinski@angusreid.org


Want to see all of our latest data first? Subscribe below.