"Winter is Coming" for Canadian Wallets - What will the Policy Rate Announcement mean for holiday spending?
NEW WESTMINSTER, BC, Oct. 25, 2022 /CNW/ - Heading into the pricy holiday season and awaiting another policy rate announcement, Canadian household budgets, already at the mercy of increasing food and fuel costs, as well as inflation, are braced for more difficulties. "This financial climate is putting an unprecedented amount of pressure on Canadians," explained Isaiah Chan, Vice President of Programs & Services at the Credit Counselling Society. "Not only are we facing increasing interest rates and higher incidents of insolvency, but many people are also struggling to pay for necessities, like food and rent. The last few months of the year, always come with a hefty price tag. Holidays and the expenses that come with them, will be yet another source of financial stress, it could be more than many Canadians will be able to manage."
The Consumer Debt Index, released earlier this month, found that over half (52%) of respondents said it was becoming less affordable to feed themselves and their families -- an increase of five percentage points from December 2021. Meanwhile, almost half (46%) of Canadians find themselves closer to insolvency – $200 or less away from being unable to meet their financial obligations. The combination of rising costs, interest rates, and inflation have already pushed people to cut back. A survey from the Angus Reid Institute found that a staggering nine-in-ten Canadians (88%) reported belt-tightening measures, an eight-point increase from August.
Unsurprisingly, these issues have led to a significant drop in consumer confidence. A recent Ipsos survey found that overall consumer confidence is now firmly in the negative (–6% versus the norm), down a full five points from last month. "Canadians have faced a lot of challenges over the last couple of years – between the Covid-19 pandemic, supply-chain issues, and global unrest. The financial impact has been significant," states Scott Hannah, President & CEO of the Credit Counselling Society. "We're going to be feeling financial reverberations from these events for a long time," he adds.
Similarly, the Ipsos Consumer Confidence Survey, also found that the significant drop in confidence suggests that things could get worse before they get better. "As households continue to feel the ongoing impact of these financial stressors, it's going to be crucial that they manage their finances as wisely as possible," observes Hannah. "For anyone also carrying a large debt load, it will only be that much harder to manage, especially as we get into the 2022 holiday-spending season. If this is your family's situation, we strongly recommend reaching out right now to get help."
The Credit Counselling Society is a non-profit organization dedicated to helping consumers manage their money and debt better. CCS provides free, confidential credit counselling, debt repayment options, budgeting assistance and financial education. Visit www.nomoredebts.org
SOURCE Credit Counselling Society
Media Inquires: The Credit Counselling Society has spokespeople from across Canada available for interviews to discuss this topic as well as any other relevant financial topics. Please feel free to reach out to the number below: Monika Ritchie, Media & Content Specialist, Direct: 604.636.0227, Email: [email protected]
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