Increasing household costs are putting Canadians on the financial brink and making feeding their families a significant challenge, according to an Angus Reid Institute report..Nearly half of Canadian families with a mortgage and with at least one child under the age of 13 in the home said they now cannot manage their mortgage payments along with other household expenses..According to the Angus Reid Institute non-profit, rents and mortgages across the nation are putting an unprecedented squeeze on a significant proportion of the population..“Inflation, the runaway horse the Bank of Canada is trying to wrangle this year, is clearly not doing Canadians any favours. But few homeowners with a mortgage or renters have wiggle room to accommodate increases to the largest line item in their budget as interest rates rise,” the institute stated in its March 7 report..In its first interest rate increase in more than three years, the Bank of Canada said more rate hikes will be necessary to curb inflationary pressures, which will pick up further due to the conflict in Ukraine..On March 2, Canada’s rate stepped up a quarter-percentage point to .50%. During a more robust economical climate, an interest hike might not have ruffled as many feathers, but given the significant number of Canadians now with record-high mortgage principle loans, the increase is having a big impact on Canadians’ housing budgets..In March 2020 The Bank of Canada cut interest rates to near zero and for the first time engaged in large-scale asset purchases, otherwise known as quantitative easing, or QE. The central bank ended its QE program last October.. Shopping-Photo-by-Atoms-on-UnsplashAtoms .Three out of five Canadians who have mortgages said their mortgage payments are now forcing them to modify expenses in other areas of their finances, including food. All but 8% of those surveyed said they had to abandon parts of their traditional budget..“Other money worries are also more plentiful among those whose mortgage or rent occupies a significant portion of their budget. Nearly all who say the high cost of their housing makes their budget tight or a real struggle say they feel left behind by the rising cost of living. Few in those groups say they are never stressed about money and at least two-thirds say they are carrying too much debt,” the institute’s report stated..Moves such as switching to cheaper brands in the grocery store have been the go-to compromise for 62% of the population and as many as three-quarters of Canadians have sacrificed their take-out spending to manage to increase in their housing costs..More than one-in-10 respondents now claim they’re experiencing real troubles balancing their household budgets alongside almost half of Canadians stating that finances are now “tight.”.When asked how they might manage an unexpected expense of $1,000, 70% of renters and mortgagees said they would have no room in their budget to accommodate the overhead. Of those surveyed, 14% of Canadians answered they wouldn’t be able to manage any increase in expenses..The institute pointed out those homeowners with variable rate mortgages and those whose fixed rate mortgages come up for renewal soon will face significant impacts with the continued expected interest rate increases..Amanda Brown is a reporter at the Western Standard
