Canadian Manufacturing

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

Longer term financial impact of the COVID-19 pandemic beginning to show in Canadians' financial plans

June 29, 2020  by CM Staff

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.”

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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)