A couple of weeks ago, the Labour Force Survey showed Canada’s unemployment rate falling to a new all-time low of 4.9 per cent. At the same time, Canada’s inflation rate increased to 8.1 per cent, with rising gas prices blamed as the number inches closer to double digits.
It can be daunting for Canadians to try to make sense of what is apparently conflicting financial news, but it is fair to say that the country is reacting with caution to the current state of affairs. When Research Co. and Glacier Media asked Canadians how they would rate the economic conditions in the country today, just over two in five (41 per cent) rated them as “very good” or “good,” down one point since our last review in January. Almost three in five (57 per cent, up three points) deem them as “bad” or “very bad.”
We observe the same fluctuation when Canadians ponder their personal finances, with 57 per cent (down one point) saying they are “very good” or “good” and 41 per cent (up three points) considering them as “bad” or “very bad.”
There is a marked drop on some of the other numbers that we track every six months. Two in five Canadians (40 per cent) think the Canadian economy will decline over the next six months, up 10 points in six months. Regionally, the perceptions of a worsening national economy are highest in Atlantic Canada (48 per cent), Alberta (45 per cent) and British Columbia (also 45 per cent). Canadians in the highest income bracket (46 per cent) and those aged 55 and over (44 per cent) are also more likely to foresee problems ahead.
This level of dejection about the future is accompanied this month by an increase in specific concerns. Half of Canadians (50 per cent) surveyed have worried “frequently” or “occasionally” about the value of their investments in the past couple of months, up nine points since January. The same proportion (50 per cent) has worried about the safety of their savings, up six points in six months.
We also see smaller jumps in the proportion of Canadians who are concerned about being able to pay their mortgage or rent (34 per cent, up three points) or about unemployment affecting their household (also 34 per cent, up three points). Just under one in four (24 per cent, down two points) have also worried “frequently” or “occasionally” about their employer running into serious financial trouble.
As the proportion of Canadians who expect the economy to worsen increases, our views on inflation are shifting. Fewer than half of Canadians (44 per cent) expect real estate prices to go up in the next six months, down 28 points since January. And while more than four in five Canadians (82 per cent) expected to pay more for gas six months ago, only 61 per cent are making the same prediction right now.
There are other items where the inflation needle did not move as much. Majorities of Canadians expect higher prices in the next six months for a week’s worth of groceries (81 per cent, down two points), a new car (68 per cent, down three points) or a new television set (57 per cent, down five points).
There are also political ramifications to everything that Canadians are experiencing. We see no change in the level of confidence that Canadians bestow on Tiff Macklem, Governor of the Bank of Canada (37 per cent). Candice Bergen, current leader of the opposition, checks in at 26 per cent, three points behind what Erin O’Toole posted in January, before the Conservative Party of Canada decided to seek a new leader.
The situation is more dire for Justin Trudeau. At the start of the year, 47 per cent of Canadians trusted the prime minister to do the right thing to help the economy. Six months later, the proportion has dropped to 41 per cent. We now have a majority of Canadians (52 per cent, up four points) who “moderately” or “completely” distrust Trudeau to manage this file.
The lack of confidence on Trudeau as an economic manager is highest in Alberta (68 per cent) and also encompasses majorities of residents of British Columbia (55%), Saskatchewan and Manitoba (53 per cent) and Atlantic Canada (51 per cent). The most troubling aspect for the federal government is that the two most populous provinces are also trending towards distrust: Ontario (48 per cent) and Quebec (46 per cent).
The federal government was supposed to coast through 2022, knowing that the New Democratic Party (NDP) would not participate in any efforts to topple it. On the economic front, the numbers are not reassuring. We see more Canadians conveying concerns about investments and savings, and fewer expressing confidence in the prime minister to act accordingly. By the start of 2023, with a new Conservative leader in place, the situation may be even more complicated than now.
Mario Canseco is president of Research Co.
Results are based on an online study conducted from July 25 to July 27, 2022, 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.