More Canadians worrying about the economy and over half are cutting discretionary spending: CIBC Poll

PHOTO: CIBC

TORONTO — COVID-19’s impact on the economy is causing many Canadians to worry about the future: 79% of respondents in CIBC’s Financial Priorities Poll say they are concerned about continued recessionary times next year, compared to 55% who said they feared an economic downturn in a December 2019 survey.

Economic worries may be a factor in why many Canadians are adjusting their financial habits.

Many respondents (63%) say they have significantly cut down on discretionary spending and more than half (55%) agree they need to get a better handle on their finances this year.

“It’s a positive sign that many Canadians are taking a responsible approach to the situation by making changes to their spending and working to limit unnecessary debt” said Laura Dottori-Attanasio, group head, retail and business banking, CIBC, in a statement. “Good cash flow management now can help you through the current situation, and over the longer term free up funds to divert towards savings or other goals.”

The survey also found that 46% of Canadians say the economic impact of the pandemic has adversely affected their finances and a similar number (47%) feel it will take more than a year to get their personal finances back on track. Canadians are prioritizing building an emergency fund in 2020, citing this as a top goal for the remainder of the year, followed by steering clear of adding on debt. Of the 22% of respondents who’ve had to borrow more in the past 12 months, the number one reason was for day-to-day items (38%) followed by a loss of income (28%).

“The impact of the pandemic will be felt by Canadians for some time. While we have a long way to go to get back to a normal economy, taking charge of your finances now with a savings and debt management plan is an important step towards putting your personal finances back on track,” added Dottori-Attanasio.

Other findings:

• Top financial goals for the remainder of 2020 are: generally saving as much as possible (37%), and avoiding taking on more debt (36%)
• Close to three-fourths of Canadians (74%) say the uncertainty of the current environment makes it difficult to plan ahead, and over half (54%) are worried about their financial future
• The number of people who say they’ve taken on more debt is lower (22%) than in December 2019 (28%). Among those who have taken on more debt, 38% say they did so to cover day-to-day expenses or due to loss of income (28%) and job loss (18%, +9% from December 2019)