Investment returns lift financially secure Canadians while a quarter of households sink deeper
Seven in 10 Canadians describe their household finances as good or very good, but a deepening fault line is opening between those riding market gains and those who cannot afford groceries, according to new polling released today (June 22) by the Angus Reid Institute.
The survey of 4,237 adults, conducted earlier this month, found that 70% of respondents in positive financial territory, while 27% reported poor or very poor circumstances.
The picture darkens considerably when those struggling are asked about the year ahead. Canadians rating their finances as poor are three times more likely to anticipate further deterioration than improvement, with 43% expecting to fall further behind against just 14% who see relief coming.
Among those in very poor shape, two-thirds expect conditions to worsen.
Those in very good financial condition hold investments at near-universal rates, while more than half of those in very poor circumstances own no stocks, bonds, mutual funds or registered accounts whatsoever.
That gap has taken on greater significance as equity markets have outpaced inflation by a wide margin since 2020. According to figures cited in the report, $100 invested in the S&P/TSX Composite in early 2020 would have grown to roughly $261 by Q2 2026, while the same amount held in cash would require $122 just to maintain purchasing power against rising prices.
A widening divide
The findings arrive against a backdrop of uneven macroeconomic signals. Unemployment has edged lower, but Canada's economy entered a technical recession last quarter, and elevated gas prices tied to global conflict have compounded an inflation burden that many households were already struggling to absorb.
While the share of Canadians saying they are worse off than a year ago has declined from 47% in June 2024 to 38% today, that figure remains well above pre-pandemic levels. The largest single group, 44%, say their financial position has held steady over the past 12 months. Only 17% say they have genuinely improved their position.
Cost of living remains the dominant concern by a substantial margin, cited by 61% of respondents as the issue they care most about. That figure climbs to 74% among those in very poor financial shape, while health care, which ranks second overall at 39%, falls sharply in priority as financial stress rises.
Cutting back on basics
Among households in the two lowest financial categories, the survey documents widespread cutbacks extending well beyond discretionary spending. Dining out has been reduced by 71% of those with poor finances and 65% of those in very poor shape. Savings have been curtailed by 71% and 66% respectively. Groceries and food at home, a category that typically absorbs reductions only under significant pressure, have been cut back by 64% of those with poor finances and 66% of those in very poor circumstances.
Grocery costs top the list of financial stressors overall, cited by 34% of all respondents, followed by saving money at 32% and fuel at 25%. For those in very poor financial shape, more than half also identified rent or mortgage payments as a primary source of stress, compared to just 2% among those in very good financial condition.
Among higher-income households, the stress picture is markedly different. Nearly half of those in very good financial shape, 48%, reported no financial stress across any of the categories surveyed.
