COVID-19 pandemic worries Canadians more than 2008 crisis did

It seems that every press briefing brings a new announcement about the plans from the federal government to assuage Canadians about the economic stability of the country during the COVID-19 outbreak.

Over the past few days, Prime Minister Justin Trudeau has announced the creation of various programs to help workers and businesses, often with stern reminders to Canadians not to “game” the system.

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In late September 2008, as the global financial crisis was beginning to unravel, I had the opportunity to ask Canadians about five specific concerns. Comparing those findings to the latest countrywide results garnered by Research Co. and Glacier Media outlines the enormity of the current crisis.

When we asked in late March, more than half of Canadians (52%) said they worried “frequently” or “occasionally” about the safety of their savings in the past month. In 2008, when coverage that predicted gloomy economic times ruled the airwaves, the proportion was 15 points lower (37%). These concerns are more prevalent now among Ontarians (59%), Canadians aged 18 to 34 (58%) and women (56%).

The ability to pay mortgage or rent was a “frequent” or “occasional” worry for 41% of Canadians in the past four weeks, 12 points higher than what was seen in 2008. On this question, British Columbia, where housing has been a consistent source of anxiety for years, is ahead of all other regions, with 46% of residents expressing concern about meeting these commitments.

In spite of all the recent announcements related to support for businesses, more than a third of Canadians (37%) have worried “frequently” or “occasionally” about their employer running into serious financial trouble – an 11-point increase from the level observed in 2008 (26%). Once again, comfort has been harder to come by for Albertans (44%) and the country’s youngest adults (50%).

The middle class, which seemed to be the cornerstone of the federal government’s financial plans before COVID-19 reached our shores, is also more likely to be concerned about unemployment (49%) and companies facing financial strife (40%) than Canadians in lower and higher income brackets.

The full effect of COVID-19 came to light just after Canadians pondered whether to contribute to a registered retirement savings plan (RRSP). Half of Canadians (50%) say they have worried “frequently” or “occasionally” about the value of their investments. While this is an understandable reaction after days that brought record losses in the stock market, the proportion is 12 points higher than in 2008.

But even as more Canadians are losing sleep over financial matters than they did almost 12 years ago, there is little appetite for blindly cashing out. Only 12% of Canadians say they would “definitely” or “probably” change their approach on investments, with almost two-thirds (65%) saying they will “definitely” or “probably” keep their current long-term strategy.

There is also some hope about Canada’s standing on the global stage. More than half of Canadians (52%) believe the domestic economy will perform better than Italy’s in the next six months, and more than one in four thinks it will outpace countries like France (32%), China (29%) and the United Kingdom (26%).

The prediction is more subdued when looking at another G7 nation. Only 22% think Canada’s economy will do better than Germany’s. In two other cases – the United States and Japan – identical proportions of Canadians foresee Canada’s domestic economy performing “better” or “worse” than the two other nations.

In late 2008, companies were under extreme pressure to cut costs and modify salary and bonus structures. Canadians knew that tough times were ahead, even if their understanding of global finance was subpar. This time around, COVID-19 is keeping most of us inside our homes. It is not surprising to witness double-digit increases in some of these indicators of apprehension.

The survey shows that Canadians are more concerned about the future of their savings, investments and jobs than they were in late September 2008. At the time, subprime mortgages and the ensuing banking collapse were clearly in the minds of Canadians. But as bad as that global recession was, there were no immediate and fundamental alterations to our way of life. COVID-19 is clearly different and is making Canadians more troubled, but still cautiously optimistic that the domestic economy will emerge on a strong footing. •

Mario Canseco is the president of Research Co.

Results are based on an online study conducted March 30–April 1 among 1,000 adults in Canada. The data has been statistically weighted according to Canadian census figures for age, gender and region. The margin of error, which measures sample variability, is plus or minus 3.1 percentage points, 19 times out of 20.

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