More Canadians are struggling to make ends meet with growing speculation interest rates will rise

There’s growing speculation the Bank of Canada is ready to start pushing up interest rates again this week, as more Canadians say they are struggling just to get by.

“The cost of living issue is one that Canadians have been living with for the better part of three years now. We first started to notice it while the pandemic was still ongoing because of global supply chain issues,” said Shachi Kurl, president of the Angus Reid Institute.

“There is a new pandemic, and that is the increasing cost of everything for Canadian consumers.”

“Groceries are more expensive, gas for your car is more expensive, insurance is more expensive, the day-to-day things you need to live your life are more expensive … but what is particularly acute in terms of housing costs has a lot to do with the ongoing problem of inflation and how the Bank of Canada is having to mitigate those inflationary measures by increasing its rate,” she told CityNews sister station, OMNI News.

The central bank conditionally paused its campaign of rate hikes earlier this year to see if its efforts to slow inflation were working, and the jury is out on whether it will keep its key interest rate frozen at 4.5 per cent Wednesday or start boosting it again as inflation has remained stubborn.

“At minimum, we are not likely to see those rates drop. If anything they will continue to stand still or increase. If you have a variable rate mortgage, that is a very cornering thing. If you’re a renter, you are not exempt from those upward pressures because we have a housing system in this country where most renters are dependent on landlords who are letting out their secondary or tertiary properties. The cost for renters will be passed down onto them — those inflationary pressures, those upward pressures that the landlords are paying.”


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A survey from Angus Reid finds three-in-10 Canadians are struggling to get by financially, with roughly half of renters and mortgage-holders saying they are already finding their monthly payment for housing tough or very difficult to manage, and Kurl says those housing costs are significant.

“There’s no escaping it. You can try to shop around for less expensive groceries, you can choose to drive less to save money, you can do other things in terms of discretionary spending in order to try to save money. What is not discretionary is the cost of housing — there’s no escape from it.”

And Kurl says the increasing cost of living grinding down the finances of so many Canadians is not just an economic blip.

“This isn’t new. We are now seeing a prolonged period of time where Canadians are saying they are feeling this cost of living pressure, which is different from various times over the past decade,” she said. “We have not seen this kind of situation continue over a sustained period of time, year over year.”

“That’s a key takeaway here — it’s endemic, it’s not going away and this is the new reality for Canadians.”

And housing is just one pressure with the cost of groceries also increasing, often faster than the core inflation rate. As the cost of the two necessities has risen, Kurl says many Canadians have leaned on credit to keep up.

“Overall consumer debt has hit a record high in Canada, and any further rate increases from the Bank of Canada would put pressure on Canadians holding credit card balances and other loans. Already, one-quarter say their debt is a major source of stress for them. Two-in-five worry about their debt in a more minor way,” said a release from the Angus Reid Institute, which adds the figure is even higher among mortgage holders.

Overall, Kurl says half surveyed feel they are in worse shape financially than they were last June.

“Not only are they saying they are worse off today than they were a year ago, [but] a significant number also say they expect to be in even worse shape a year from now, which would represent two years of decline. So, for those in worse situations, those whose household incomes are less than $50,000 to $75,000 per year, these are pretty big stressors.”

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