Laddie James is more than just a Saskatoon and area eXp REALTOR®; he is your trusted real estate partner committed to finding the perfect place to call home. In his latest article, he shares information from Statistics Canada regarding the current Canadian financial situation in Canadian households
Forest fires and drought weighed heavily on the economy in August, with higher interest rates and inflation. The second quarter of the year saw a marginal contraction in GDP, and if data shows continued negative growth in September, Canada will meet the definition for a recession. Nivrita Ganguly reports – Oct 31, 2023
A new Statistics Canada report has found that one in three Canadians are living in a household that is experiencing financial hardship.
Individuals aged 15 and older reported living in households that had difficulty paying for necessary expenses such as transportation, housing, food and clothing throughout October.
The report, released Friday, found that 41.3 percent of renters were more likely to struggle financially than those living in a residence owned by a household member with a mortgage. Financial pressure eased even more for those living with owners without a mortgage.
“While the proportion of people in households finding it either difficult or very difficult to meet financial needs in October 2023 was down slightly compared with the same month a year earlier (35.5%), it remained notably higher than the proportion recorded in October 2020 (20.4%),” the report said.
Among the largest regions in Canada, southern Ontario had the highest proportion of people living in financially strapped households.
Almost half of respondents in the St. Catharines-Niagara area reported financial hardship at 41.8 percent. Next was Windsor at 41 percent, Kitchener-Cambridge-Waterloo at 40.7 percent, and Toronto at 38.1 percent. The lowest proportion was in the Quebec City region at 20.5 percent.
Year-over-year growth in the Consumer Price Index decelerated from a peak of 8.1 percent in June 2022 to 3.8 percent in September 2023, the report says, but many Canadians are still feeling a significant financial pinch.
“The higher cost of essential goods and services continues to place financial pressures on many households across Canada. In September, for example, increases in the cost of shelter (+6.0%) and food (+5.9%) outpaced annual wage growth (+5.0%),” it said.
Almost half of immigrants who arrived in Canada in the last 10 years — 44.7 percent — said they lived in a household experiencing financial hardship.
Lone-parent families in which the parents were not employed were the largest group in the report to have financial difficulties in their household, at a proportion of 69.8 percent.
For Canadians living in dual-earner households with children, 36.1 percent experienced difficulties meeting financial needs in October.
Among the largest racialized population groups, South Asian (47 percent) and Black (43.9 percent) Canadians were found to be more likely to live in a household with financial hardships. The proportion was lower for Chinese Canadians, at 26.8 percent.
An Ipsos poll conducted in October found that most Canadians believe owning a home has become a privilege that only the rich can afford.
The poll surveyed 1,500 adults last month and found that 71 percent of respondents live in communities where they say a housing crisis exists.
The impacts of a higher cost of living are also being felt at food banks nationwide. Since March 2021, usage has jumped by almost 80 percent nationwide.
While the annual price growth for groceries cooled to 6.9 percent in August from double-digit highs this time last year, trips to the grocery stores remain a pain point for Canadians squeezed between higher interest rates and an overall inflation rate of 4.0 percent — still double the Bank of Canada’s targets.
The Bank of Canada has increased its benchmark rate by 4.75 percentage points since March 2022, with the bulk of the tightening coming last year. In announcing its second consecutive rate hold on Oct. 25, the central bank officials kept the door open to future hikes if needed to get inflation fully back beneath the two percent target.
“It’s actually quite concerning,” says Sylvain Charlebois, director of the Agri-Food Analytics Lab.
— with files from Global News’ Craig Lord.
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