Canadians are cutting back on groceries and entertainment as red-hot inflation continues to put pressure on household budgets, a new Yahoo/Maru Public Opinion poll has found.
The survey of 1,517 Canadians found that 60 per cent of respondents set stricter priorities and reduced spending due to higher prices in July than they did in June. Among those that are reining in spending, the top categories facing cutbacks include dining out at restaurants and ordering in (68 per cent), followed by groceries (61 per cent) and entertainment such as movies, sports events and personal sports activities (55 per cent).
Those living in Atlantic Canada are most likely to be cutting back on spending, with 71 per cent reporting that they are setting stricter priorities amid high inflation, followed by those living in Alberta (68 per cent), Manitoba/Saskatchewan (68 per cent), Ontario (60 per cent), British Columbia (59 per cent) and Quebec (53 per cent).
The most recent data from Statistics Canada showed the Consumer Price Index (CPI) jumped 8.1 per cent in June, the biggest year-over-year increase since January 1983. While the rise was largely driven by skyrocketing gas prices, price hikes remained broad-based, with seven of the eight major components calculated in CPI rising by more than 3 per cent.
Food prices were up 8.8 per cent in June compared to last year, and food purchased at grocery stores was up 9.4 per cent annually. Compared to last year, the price of fresh vegetables jumped 9.5 per cent, dairy products were up 8.7 per cent and meat increased 8 per cent. The rising cost of food had already forced a majority of Canadians to cut back to just the necessities, a previous Yahoo/Maru Public Opinion poll found.
Gas prices have since dropped off from the peak reached in June, which was reflected in the Yahoo/Maru polling data in that fewer Canadians cut back on gasoline spending in July (43 per cent) compared to June (53 per cent).
But even as gas prices moderate from previous highs, CPI is expected to continue rising in the coming months. The Bank of Canada has warned that inflation will likely remain at around 8 per cent over the next few months and that more rate hikes are likely in order to tame soaring inflation.
Rising prices have left many Canadians concerned, the poll found. Nearly half of the survey respondents (49 per cent) say they are worried about the impact inflation will have on their ability to buy necessities, while 31 per cent say they are comfortable with their situation (31 per cent) and 15 per cent say they are panicked.
The survey of 1,517 Canadian adults was conducted between July 24 and July 25 and has an estimated margin of error of +/- 2.5 per cent, 19 times out of 20.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.