This holiday season, Canadians are scaling back on spending says new data from the Angus Reid Institute (ARI).
The national non-profit organization found that 56% of Canadians are reportedly spending less on Christmas-related purchases as inflation continues to loom. Unsurprisingly, budget woes are especially apparent amongst those with lower incomes, with 61% of households earning less than $50,000 annually saying they are spending less on presents and decorating this year. A lesser proportion -- 45% -- of households with incomes above $200,000 are reporting the same.
The budget crunch extends to charitable giving as well. ARI’s data shows that 37% of respondents have cut back on donations in recent months, including 41% of Canadians over the age of 54. This is significant because older Canadians have historically been much more likely to donate compared to younger generations.
“All this comes at the end of one of the most financially difficult years in recent memory for many Canadians,” says ARI. Amid rampant inflation, the Bank of Canada has raised interest rates six times since the spring, with another hike anticipated for later this week. As such, 50% of Canadians report being “financially worse off” this year compared to last year -- the highest proportion in the history of ARI’s data. Meanwhile, only 13% of respondents have seen their financial situation improve over the past 12 months.
Conversely, 24% of younger Canadians, aged 18 to 34, report being better off financially this year than they were last year, compared to 92% of older Canadians, aged 55 and older, who see themselves facing persisting or worsening financial difficulties given the past 12 months.
Looking ahead, “there is not much in the way of personal financial optimism among Canadians,” ARI also notes. Just 20% of Canadians believe their financial situation will improve in the coming 12 months, 41% believe they will “tread water,” and 31% anticipate their finances will deteriorate further.
Provincially, the organization reports that financial pessimism is highest in Nova Scotia, with 43% of respondents expressing financial concerns, followed by Saskatchewan (42%), and New Brunswick (41%). Optimism is higher in Ontario (23%) and Newfoundland and Labrador (23%).
