Rising inflation and interest rates have forced some British Columbians to cut back on discretionary, and even some essential spending, according to a new survey.
The data, collected by polling firm Ipsos on behalf of debt management company MNP, showed just over one in four B.C. respondents (26 per cent) had reduced spending on necessities such as food, utilities and housing.
About three in 10 said they were buying cheaper versions of everyday purchases (32 per cent) and driving less (29 per cent).
And almost half (46 per cent) said they’d slashed spending on non-essentials like travelling, dining out and entertainment.
Just 12 per cent said they hadn’t seen their expenses increase.
“While many households in BC are trying to adjust their budgets by cutting costs where they can, as the cost of living continues to rise — and it’s likely to get worse before it gets better — households will have to make even tougher decisions about what to cut, and could find themselves piling on debt to keep up with their monthly bills,” B.C.-based MNP licensed insolvency trustee Linda Paul said in a statement.
The survey also found six in 10 (59 per cent) respondents were feeling the results of interest rate hikes.
The Bank of Canada has hiked the key overnight rate from 0.25 per cent to 1.5 per cent since January, and is expected to increase the rate by as much as another 0.75 per cent on Wednesday.
The move is intended to counter surging inflation, which hit a near-40-year high in May.
About half of respondents (49 per cent) said they would be in financial trouble if interest rates continued to climb, while four in 10 said rising rates could move them closer to bankruptcy.
A further 26 per cent said they couldn’t handle an interest rate hike of one per cent.
“Inflation is nearing a 40-year high, and as a result, we are seeing intensifying pressure for more aggressive interest rate increases to tame that inflation,” Paul said.
“British Columbians who are not financially prepared to absorb more interest rate hikes will likely find themselves in financial difficulty in the near future, as the costs of their debt repayment obligations become increasingly unmanageable.”
Paul advised people with concerns about their ability to pay their bills to get advice from a licensed insolvency trustee.
For this survey, a sample of 2,000 Canadians aged 18 years and over was interviewed between June 6-9, 2022, with data weighted to Canadian census data. The poll is accurate to within ±2.5 percentage points, 19 times out of 20, had all Canadian adults been polled.
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