The rising cost of everyday items such as food and gas is a top economic concern, and two-thirds of Canadians are worried their pay will not keep up with inflation, according to a new Nanos Research survey.
The survey, which was conducted for The Globe and Mail, also found respondents were largely supportive of the federal government’s October announcement that it was ending the Canada Recovery Benefit pandemic-relief program for individuals while continuing to offer wage and rent supports for businesses in the hardest-hit sectors of the economy.
These two topics – inflation and the future of federal COVID-19 benefits – have been among the top political issues discussed in Ottawa since Nov. 22, when members of Parliament returned to the House of Commons. Their last sitting was in June, months before the September election that resulted in the Liberals being returned to power with another minority government mandate.
Food inflation is the next big threat to Canadians’ finances
The debate intensified last month after Statistics Canada released the latest inflation figures for October, which showed a 4.7-per-cent annual rate of growth in the consumer price index, an 18-year high.
Pollster Nik Nanos said the survey results indicate a strong sense of unease over pocketbook matters.
“What’s absolutely clear is that there is a very high level of anxiety out there among Canadians. They’re worried about inflation. They’re worried about the price of everyday goods,” he said.
Mr. Nanos said concerns about inflation are likely adding to existing worries over prolonged pandemic measures and extreme weather events, particularly in flood-ravaged British Columbia.
“It’s like a pile on of anxiety, because now people are worried about just paying for basic goods,” he said.
One survey question asked respondents to identify their biggest economic concern from a list of options. The cost of everyday items like food and gas was selected by 50.1 per cent of respondents, far more than the 19.5 per cent who said it was the cost of housing. For 17.9 per cent of respondents, rising government debt was the biggest concern. Others chose high taxes (7.6 per cent) and job security (2.7 per cent). And 2 per cent said they were unsure.
When asked if they are confident, somewhat confident, somewhat not confident or not confident that their pay will keep up with the rising cost of living, close to two in three respondents said they were either not confident (43 per cent) or somewhat not confident (22 per cent). Only 8 per cent said they were confident, and 22 per cent said they were somewhat confident. Five per cent said they were unsure.
The public concern over pay is present even though annualized month-over-month wage gains are “off the charts,” according to a recent analysis by Derek Holt, Scotiabank’s head of capital markets economics. The bank analysis pointed to Statistics Canada data showing that Canada has been registering about 7 per cent to 9 per cent gains in the average hourly wages of permanent workers every month since July.
The Nanos survey also asked respondents which federal party they trust most to manage inflation. The Conservative Party was selected by 26.9 per cent, followed by the Liberals (24 per cent) and the NDP (9.1 per cent). Nearly a quarter of respondents (24.5 per cent) selected “none of them.”
High inflation is putting pressure on the Bank of Canada to start raising interest rates as a way of cooling down consumer price growth. The bank now expects to start hiking rates sometime between April and September – a quarter earlier than its previous projection. It will announce its next rate decision on Wednesday. The bank is forecasting that the rate of inflation will average 3.4 per cent next year.
The survey found that a majority of Canadians either support (43 per cent) or somewhat support (28 per cent) the government ending the Canada Recovery Benefit, while 11 per cent said they oppose the decision and 14 per cent said they were somewhat opposed.
A strong majority of respondents also either supported (30 per cent) or somewhat supported (42 per cent) the government continuing to provide wage and rent subsidies exclusively for businesses in the hardest hit sectors of the economy.
The government is attempting to address these adjustments to COVID-19 benefits with Bill C-2, the first substantive piece of legislation it introduced in the new Parliament. The bill would implement the changes the government originally announced in October. Those included the continued wage and rent subsidies, which would be more limited than in the past, and also an end, as of Oct. 23, to the Canada Recovery Benefit.
The NDP is strongly opposed to ending the Canada Recovery Benefit, and voted against C-2 at second reading, as did the Conservatives. The vote to send the bill to committee was adopted because the Bloc Québécois voted in favour, along with Liberal MPs.
“Canadians obviously are good with kind of tapering out support for individuals, but they realize that there are still sectors that are hard hit from the pandemic and have not fully recovered. So what I would call a fairly balanced view from Canadians on that front,” Mr. Nanos said.
Nanos Research asked these questions about the economy as part of a random omnibus survey of 1,010 Canadian adults that it conducted from Nov. 27 to Nov. 29. The margin of error is plus or minus 3.1 percentage points, 19 times out of 20.
With a report from Mark Rendell
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Bill Curry