Canadians Struggle with Inflation and Its Impact on Mental Health

A recent Ipsos poll reveals that Canadians are facing a twofold dilemma due to high inflation. Not only is it burdening their wallets, but it is also taking a toll on their mental health. The poll, commissioned by MNP Ltd., found that more than half of the respondents (51%) are staying home more often to save money, a phenomenon referred to as “inflation isolation.”

Additionally, a third of the respondents reported spending less time socializing with friends as a way to cut costs. Grant Bazian, the president of MNP Ltd., explains that rising inflation and interest rates are causing Canadians to feel mental anguish. Fearful of spending money, individuals are refraining from normal activities, resulting in feelings of isolation.

The poll’s release coincides with the acknowledgment from Tiff Macklem, the head of the Bank of Canada, that while inflation rates are beginning to slow, higher interest rates are squeezing Canadians. This rapid increase in the benchmark interest rate has caused mortgage payments for many homeowners to skyrocket since March 2022.

Food costs have also been surging, forcing Canadians to dig deeper into their pockets to afford everyday essentials. Bazian comments on this trend, stating that Canadians are being practical and prioritizing spending on necessities like housing and food, while cutting back on expenses outside the home such as entertainment and travel.

The Ipsos poll further reveals that 34% of Canadians reported paying more in monthly debt payments compared to a year ago. Additionally, almost half of the respondents (45%) expressed concerns about being unable to cover their living expenses without accumulating more debt in the next year.

The poll also highlights the psychological impact of higher interest rates and inflation. One in five respondents reported feelings of social isolation or loneliness, while two in five respondents experienced increased stress and anxiety due to the current economic conditions. Those who rated their personal debt as “terrible” were significantly more likely to feel these negative effects compared to those who rated their debt situation as “excellent.”

The poll reveals that younger Canadians and those earning less than $40,000 are most likely to reduce their socializing and spending time with friends, leading to increased social isolation and loneliness.

Bazian recommends reaching out to friends and family despite the financial challenges and emotional strain caused by high living costs and debt. He suggests more affordable ways to socialize, such as outdoor activities and organizing potluck dinners. For those struggling with debt, seeking assistance from debt specialists to explore available options is recommended.

The data for this poll was collected by Ipsos on behalf of MNP Ltd. between September 5-8, 2023. The sample consisted of 2,000 Canadians aged 18 and over, with weighting adjustments made to ensure a representative sample. The poll has a credibility interval of ±2.5 percentage points and is considered accurate 19 times out of 20. Other sources of error may include coverage error and measurement error.

— With files from Global News’ Craig Lord and the Canadian Press