
Highest levels of financial stress identified in Alberta, Saskatchewan, Newfoundland and Labrador
July 9, 2024 – As the mercury rises across the country, inflation has reportedly cooled, leading many Canadians to hope that better financial days lie ahead.
New data from the non-profit Angus Reid Institute finds those days have yet to arrive. One-in-three Canadians (32%) continue to fall into the “Struggling” group on the ARI Economic Stress Index, which measures how well Canadians are keeping up on core economic indicators, alongside their own economic outlook. There is now a nine-point gap between this group and the next closest. Two years ago, by comparison, the Struggling were one-quarter of the population. Falling are the number of “Comfortable”, a group that is now 23 per cent of the population, compared to 29 per cent in 2022.
Click below to see Key Takeaways from the data.
While the Struggling have risen, the Comfortable have fallen. To see more about the Economic Stress Index click here.
While inflation has stabilized in recent months, prices remain high according to what Canadians are encountering in their daily life. Asked about their perceptions of prices for a basket of goods similar to those that comprise to Consumer Price Index, there are almost no products where Canadians are seeing relief.
The Full Story
INDEX
Part One: Top Issues for Canadians
- Cost of living continues to dominate as interest rates begin to fall
- What to watch for – Concern over Immigration rises, top three unchanged
Part Two: Economic outlook
- While inflation has stabilized, Canadians see no relief in costs across the economy
Part Three: Economic stress and price perception
- The politics of financial angst
- Checking in on housing
Part One: Top Issues for Canadians
The word from economists around the country is one of cautious optimism as the Bank of Canada signals relief from high interest rates may continue to be in the forecast. The BoC cut its key rate in June for the first time since March 2020 in response to lower inflation. Higher than expected inflation in May cast doubt on the likelihood the Bank would continue cutting rates in July, but the expectation is there will be further rate cuts this year. For Canadians, that issue – inflation and the cost of living – continues to be top of mind, alongside the housing affordability it influences.
Cost of living continues to dominate as interest rates begin to fall
Asked which Canadian issues they are most galvanized by, three-in-five Canadians (60%) say cost of living concerns are paramount, while health care is chosen a distant second by 41 per cent. Housing affordability, too, is registered as a top issue for at least one-in-three:
What to watch for – Concern over Immigration rises, top three unchanged
Cost of living concerns have dominated Canadians’ priorities for the past year, though the proportion choosing this issue has dropped by three points compared to last June. That said, one issue has risen considerably – immigration. The number saying this is a top issue has increased from eight to 18 per cent in one year as record levels of immigration continue and criticisms about insufficient services and housing increase.
From coast to coast the worry about cost-of-living tops Canadians’ lists. Health care makes up the second highest priority in every region, but particularly in Atlantic Canada.
Part Two: Economic outlook
While inflation may be cooling, Canadians are feeling little relief. Half (47%) believe they are worse off financially now than they were a year ago; the bulk of the other half say they are treading water, no worse nor better (36%) while a handful (15%) believe they are further ahead.
For two years, the Canadians who feel they are falling further behind economically have been in the plurality. In the 12 years of ARI tracking prior to 2022, Canadians were more likely to feel they were at least in the same financial position as 12 months earlier than to say they were falling behind:
Economic pessimism continues to be high relative to the previous decade. One-third (34%) of Canadians believe they will be financially worse off a year from now, while two-in-five (39%) expect to be in a similar position. One-in-five (18%) believe they will better their economic position in the next 12 months:
While inflation has stabilized, Canadians see no relief in costs across the economy
Last month’s rise in inflation was primarily driven by shelter cost increases. Many other items in the basket of goods that Statistics Canada measures for inflation have stabilized or even declined in prices seen earlier this year. However, the sense among Canadians is that everything is getting more expensive around them. For example, nine-in-ten (87%) say the price of produce has increased, though fresh fruit and vegetables have declined in price since January according to Statistics Canada. Further, the increase in price for meat has been marginal – 0.67 per cent – since the beginning of the year, but approaching nine-in-ten (87%) say they’ve noticed that meat has been more expensive in recent months. While inflation may be decelerating, Canadians continue to feel that everything is getting more expensive around them.
*Change in CPI for tobacco shown; price of cannabis remained flat; source: Statistics Canada
Part Three: Economic stress and price perception
Since January 2022, the Angus Reid Institute has tracked an “Economic Stress Index”. This index analyzes variables relating to household costs, debt and stress, as well as financial self-evaluation, optimism and pessimism among Canadians. For further explanation, click here. These measures are amalgamated to create an index sorting Canadians into four groups: the Thriving, the Comfortable, the Uncomfortable and the Struggling. The latter represents the largest proportion of Canadians – one-third (32%) – and has done so since last year. Similar sized groups are Thriving (23%) and Comfortable (23%), while more than one-in-five (22%) are Uncomfortable.
Throughout most of 2022, those who were Comfortable or Thriving represented at least half of Canadians, but since 2023, there are a larger share who are Uncomfortable or Struggling:
Economic stress appears to be unevenly distributed throughout the country. Approaching half (46%) in Saskatchewan and Newfoundland and Labrador (46%) are considered Struggling by the index. Meanwhile, one-third (34%) in Quebec are in the Comfortable category. Those in Saskatchewan have consistently been more likely to be in the Struggling category than others across the country.
Those in major western Canadian cities like Regina, Saskatoon, Edmonton, and Calgary, alongside suburban Toronto, are more likely to be Struggling, with Montrealers most likely in the nation among urbanites to be Thriving:
The politics of financial angst
The economic pain of the last few years has perhaps played a role in shifting the federal politics picture heavily towards the Conservatives, who currently lead the governing Liberals by 20 points in vote intention. Notably, two-in-five Canadians said in April that they believed the Conservatives led by Pierre Poilievre would be best suited to manage the economy, while three-in-ten (31%) believe Poilievre is best to handle housing affordability. In both cases, the Conservatives outpace the Liberals led by Justin Trudeau and the NDP led by Jagmeet Singh.
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The Economic Stress Index further illustrates how Canadians who are struggling economically have played in the rise in the Conservatives’ vote intent. More than two-in-five (44%) current CPC supporters are classified as Struggling by the index, the largest portion of any group of political supporters. Meanwhile, two-in-five (37%) current Liberal voters are Thriving, while the NDP draws near even support from the Thriving, Comfortable, Uncomfortable and Struggling:
Checking in on housing
Housing affordability has certainly garnered the attention of provincial and federal governments in recent years, with the federal government announcing billions in supports and incentives to boost building, and provinces making investments and policy changes to increase stock. Canadians have been experiencing the challenges, and calling for action for years, and evidently are still looking for answers.
The proportion who say they are having a tough time, or a very difficult time has risen to 44 per cent, up two points from last year and up seven points compared to 2022:
Renters are evidently having the most difficult time in keeping up with housing costs. This, as rent increases continue to break records in urban areas. More than half (56%) of renters say they’re having a tough time or worse. Homeowners with a mortgage are not far behind, with 47 per cent saying this is a challenging part of their financial reality:
Among owners who are paying a mortgage, there are challenges across all income levels, but the $100,000 mark in household income appears to be a point at which paying become more manageable for some. A majority of those below this mark are having a tough time, compared to 40 per cent above it:
Survey Methodology:
The Angus Reid Institute conducted an online survey from June 14-20, 2024 among a representative randomized sample of 4,204 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 +/- 1.5 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. Detailed tables are found at the end of this release.
For detailed results by age, gender, region, education, and other demographics, click here.
For the full release including methodology, click here.
For the questionnaire, click here.
Shachi Kurl, President: 604.908.1693 shachi.kurl@angusreid.org @shachikurl
Dave Korzinski, Research Director: 250.899.0821 dave.korzinski@angusreid.org
Jon Roe, Research Associate: 825.437.1147 jon.roe@angusreid.org @thejonroe