One-third of households say they’re financially worse off compared to year ago: poll

OTTAWA – One-third of Canadian households say their financial situation has worsened over the last year, with families in lower income brackets more likely to report being worse off, a new poll suggests.

According to a Leger poll commissioned by the Association for Canadian Studies, 34 per cent of Canadian households say they're financially worse off compared with a year ago.

The majority of respondents, 58 per cent, said their financial situation was about the same as it was a year ago.

Nine per cent reported their financial situation has improved.

Jack Jedwab, president of the Association for Canadian Studies, said the most striking finding in the survey is the unequal challenges Canadians have faced over the last year, with those in lower income brackets feeling the largest pinch.

Among Canadian households earning less than $40,000, 42 per cent reported their financial situation has worsened. That's in comparison with 25 per cent of households earning $100,000 or more.

"People … in lower income brackets are finding the pinch particularly difficult in terms of the effects of the inflation and higher interest rates and so forth," Jedwab said.

High inflation and rising interest rates have squeezed Canadians' finances over the last year. To clamp down on rising prices, the Bank of Canada has raised interest rates aggressively with eight straight increases since March last year.

Economists say lower-income households are especially vulnerable to inflation because they save less, leaving less of a buffer in the face of high inflation. That means higher prices take a larger bite into their budgets.

Meanwhile, higher-income earners save more and can weather the storm more easily.

The survey also found Quebecers were the least likely to report their financial situation has worsened, while respondents in British Columbia were the most likely to report being worse off.

Among Quebecers, 22 per cent said they're worse off. The figure is nearly double in British Columbia, with 43 per cent reporting their financial situation has worsened.

Jedwab said diversity in responses across the country may have to do with the housing market and differences in housing prices.

Renters were also more likely than homeowners to report their financial situation has worsened.

The online survey was completed by 1,554 Canadians between Jan. 23 and 25 and cannot be assigned a margin of error because online polls are not considered truly random samples.

This report by The Canadian Press was first published Feb. 7, 2023.