According to the BMO Real Financial Progress Index, the bank found that “77 per cent of Canadians say inflation is impacting their holiday spending decisions.”
Additionally, the report found that “overall financial confidence significantly dropped, with 69 per cent of Canadian adults feeling confident compared to 75 per cent a year ago.”
In large part, inflation is impacting the majority of peoples spending this holiday season, with 37% saying it means they will be purchasing less expensive gives and 28% saying they will reduce the number of gifts they give.
Inflation is also impacting people’s plans to make major purchases, the bank found that 42% “plan to modify or push back major purchases that they were planning to make this year”, which includes 63% of Canadians who “no longer intend to move forward on large purchases such as buying a car or home.”
Currently, 82% of Canadians say their “financial situation is causing them increased anxiety”, with housing costs being one of the greatest sources of financial anxiety at 71%.
While Canada has a universal healthcare system, this is not reducing people’s financial anxiety surrounding medical care costs. The report found that 54% of Canadians between the ages of 45 and 54 reported that keeping up with medical bills is causing them financial anxiety.
Sal Guatieri, Senior Economist at BMO says that “Given the highest inflation in four decades and the fastest interest rate increases in three decades, it’s not surprising that Canadian families, especially younger ones, are feeling substantial strain on their finances and well-being,”.