Inflation and the financially vulnerable
A new study from Statistics Canada highlights the effects of inflation on different demographic groups
By Rob Roach, ATB Economics 14 February 2023 1 min read
Although not a surprise, it bears mentioning that general economic conditions are experienced differently depending on the financial situation of individual households. The unusually high level of consumer inflation that has been in play in Canada since mid-2021 is a prime example.
As a new Statistics Canada report entitled “Rising prices and the impact on the most financially vulnerable: A profile of those in the bottom family income quintile” states: “the adverse effect of rising prices is not felt equally among different demographic groups. Some groups such as those on fixed income and those in the bottom income quintile are likely to be more affected by rising inflation. … It affects poorer people more than the richer as the latter spend a lower proportion of their income on essentials, and hence have more maneuverability and more ways to protect themselves.”
Key findings in the report include:
“In April 2022, more than six in ten (63%) Canadians in the lowest household income quintile reported being very concerned about their ability to meet everyday expenses. This was 1.5 times higher than those in the third quintile (42%) and over 3 times higher than those in the top quintile (19%).”
“Canadians are also concerned with rising home and rental prices, with 30% being very concerned with their ability to afford housing or rent because of the rising cost of housing. … Almost half (46%) of individuals in the bottom income quintile expressed this concern, compared to 17% of those in the top quintile.”
“About one in five (19%) individuals in the bottom income quintile reported that they had to often borrow money from friends or relatives or take on additional debt to meet day-to-day expenses, compared to less than one in ten (8%) of those in the other income quintiles. In the top quintile, only 2% had to often borrow money or take on additional debt.”
Answer to the previous trivia question: At 39 years, 11 months and 29 days of age on the day he was sworn in, Joe Clark holds the record for the youngest Prime Minister of Canada.
Today’s trivia question: What popular website debuted on Valentine's Day in 2005?