In a new research study, the majority of Canadians say they have cut spending in recent months, and two-thirds of Canadians say they are stressed about money, according to data released by the Angus Reid Institute, where the research also found that more than half of Canadians cannot keep up with the cost of living.
 

Four out of five Canadians say they have cut spending in recent months either by reducing their budget, delaying a major purchase, cutting back on travel and charitable donations, or postponing savings for the future "according to a report issued by an independent journalistic research agency.

In a study involving 2,279 participants, 42 percent said they are delaying a major purchase, 41 percent said they are driving older cars, and 57 percent said they are reducing overall discretionary spending.

The study also indicated that some Canadians are experiencing more financial stress than others.

According to Angus Reid, Canadians in Saskatchewan and Atlantic Canada are 50 percent more likely than those in other parts of the country "to use a surprise $5,000 gift to pay off debts" if received.

The nonprofit research also pointed out that people in Alberta and the Maritimes are more likely than those in other parts of the country to say they have cut spending in recent months.

The results also indicate that older Canadians reported being in a better position "to handle unexpected expenses."

In the study, three out of five participants over the age of 54 said they could manage an additional $1,000 in spending this month, "compared to two out of five among their younger peers."

Those in the 35 to 54 age group are also the least likely to comfortably afford additional expenses.

With the recent drop in gas and food prices across the country, economists pointed to a slowdown in annual inflation in Canada, which slowed to 7.6 percent in July.

Experts also revealed that June saw a potential peak in the overall inflation rate, reaching the highest level in 40 years at 8.1 percent due to monthly increases since June 2020.

Meanwhile, Statistics Canada released data showing a 35.6 percent increase in gas prices in July compared to last year, much lower than the 54.6 percent increase in fuel costs in June.

But Canadians still feel the burden of inflation, as food prices rose by 9.9 percent in July compared to last year, and this feeling may deepen amid rising recession fears.

RBC expects the Canadian economy to be on track for a "mild recession" in 2023, due to labor shortages, unemployment claims, and the delayed economic impacts of pandemic restrictions leading to GDP growth of less than 1 percent.

Although this outcome is uncertain, the Angus Reid Institute noted that consumer sentiment is affected, with 76 percent of study participants saying they are "stressed about their financial situation."

Meanwhile, inflation remains above the Bank of Canada's 2 percent target, as the central bank prepares to announce the next interest rate on September 7.

The Angus Reid Institute conducted an online survey from August 8 to 10, 2022, with a representative random sample of 2,279 Canadian adults from the Angus Reid Forum members.

For comparison purposes only, a probability sample of this size carries a margin of error of +/- 2.0 percentage points, 19 times out of 20."