Canadians Drawing On Savings To Meet High Cost Of Living While Executives Get Raises

Written by Alex Cosh

A recent poll from Angus Reid showed that 40 per cent of Canadians are dipping into their savings in order to cover high costs of living.

The poll indicates that drawing on savings comes even as two-thirds of Canadians are already cutting back on "discretionary spending," marking a 14-point increase from last year.

In addition to those withdrawing saving funds, 35 per cent said they are deferring RRSP and TFSA contributions. "Little wonder then, that fully one-in-three (34%) Canadians say they’re in either 'bad' or 'terrible' shape financially," the pollster explained. "This represents a six-point increase from last July."

Overall costs for household basics have continued to steadily rise this year. According to the most recent Consumer Price Index report, costs increased by 5.2 per cent from February 2022 to February 2023.

In particular, grocery prices remained elevated, with food purchased from stores rising 10.6 per cent year over year. Shelter costs rose at a slower pace, but nonetheless increased 6.1 per cent year over year.

At a time when Canadians are dipping into savings to make ends meet, at least one grocery chain executive has enjoyed a seven-figure pay increase. As reported by The Globe and Mail last week, "[Loblaw executive] Galen Weston received a $1.2-million raise in 2022, bringing his total pay to $11.79-million, after consultants hired by his family-controlled company determined that he was underpaid."

The recent federal budget proposed a one-time "grocery rebate" to be paid through the GST tax credit mechanism to help cover high costs for food. However, as we noted in a previous newsletter, the payment works out to just $9 per week for a family of four over the course of 12 months.

Angus Reid's poll also found that 45 per cent of Canadians have not received pay increases in the past year to keep up with rising costs of living.