41% of Canadians Don’t Trust the Bank of Canada to Cool Inflation
As mortgage rates continue to increase for homeowners all across the country, 41% of Canadians say they don’t trust the Bank of Canada (BoC) to fulfill its mandate to cool inflation.
Results from an Angus Reid Institute study found that faith in the BoC was shaky, with only 46% saying they trust it to fulfill its mandate adequately. Among Conservative and PPC supporters, distrust was even higher, with 59% and 86%, respectively, saying they do not trust the bank.
These results come as the country experiences the highest inflation rate it’s seen in 40 years, with Statistics Canada revealing earlier this week that inflation had reached a staggering 7.7%. The Angus Reid study found that 45% of Canadians say they are worse off now than they were one year ago — the highest level in at least 12 years. A third of respondents said they expect their situation to get even worse over the next year, which is the highest number to have said so in over a decade.
To combat sky-high home prices, the BoC has introduced three interest rate hikes, with more expected throughout the rest of the year. As a result, one in five Canadians say their mortgage payments have already increased and more than half — 53% — say they expect this will happen to them.
Handling the extra monthly costs is not going to be easy for many Canadians. The study results show that 35% of Canadians say they couldn’t handle without difficulty a monthly increase of $150. And if that increase were to double to $300 a month, 66% say they would have to make major changes or simply could not afford it at all.
In Canada’s larger markets, these numbers are not only plausible, but extremely likely. As an RBC Economics report released on Thursday describes, “a 1 percentage-point rate increase raises mortgage payments by more than $600 per month in Vancouver, $554 in Toronto, and $481 in Victoria, based on typical home prices in the first quarter (valued at $1.4 million, $1.3 million and $1.1 million, respectively).”
Of course it’s not just mortgages that are draining Canadians’ wallets. Half of Canadians say it’s difficult to afford their groceries, and one third say the amount they’re spending on gas has gone up over the past month. To combat this, nearly half of the study respondents said they have used alternative transportation and decreased their gas spending.
Renters are also feeling the brunt of rising costs, with half saying their rent is tough or very difficult to afford. And some Canadians are having to take on more debt to get by.
“Two-in-five Canadians (38%) say they have credit card debt — rising to 62% among those who are Struggling on the ARI Economic Stress Index,” the report reads. “Among this group, three-in-five (58%) say it will take them more than a year to pay this off.”
The BoC isn’t the only target of Canadian’s frustrations, with an overwhelming 77% of Canadians saying their province has done a poor job of handling inflation.
Laura has covered real estate in Toronto, New York City, Miami, and Los Angeles. Before coming to STOREYS as a staff writer, she worked as the Toronto Urbanized Editor for Daily Hive.