Cost-of-living crisis straining Prairies: Poll

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Cost-of-living increases have strained the financial flexibility of more than half of the Prairies (Manitobans and Saskatchewan residents), according to a new poll by the Royal Bank of Canada (RBC).

The financial flexibility poll — Winter Edition — found that 55 per cent of Manitobans and Saskatchewan residents are spending all their income on essential bills, and half of them are living from one paycheque to the next.

The poll further revealed that 56 per cent of those living in the region feel financially paralyzed due to rising costs, while 46 per cent can no longer maintain their standard of living and more than a quarter (31 per cent) admit that their finances are in a constant state of chaos.

It also found 52 per cent of those living in the Prairies are concerned they won’t ever be able to get ahead financially, while more than half, or 54 per cent, find it difficult to think about their long-term financial future as they struggle to manage day-to-day expenses. A sizable 43 per cent worry that it’s not a question of “if,” but “when” they will run out of money to live comfortably. About a quarter (23 per cent) believe they are already on the “brink of financial ruin.”

Those polled are also deeply concerned about unexpected expenses. A notable 66 per cent feared they don’t have enough money to handle such expenses today, while 52 per cent cited not being able to cover unexpected costs as their biggest financial risk for the upcoming year.

Rising costs, such as inflation, have led to an erosion in the cash flow for many residents, RBC regional financial planning support director Craig Bannon told the Sun.

He added that 56 per cent of residents in Manitoba and Saskatchewan reported using emergency funds or retirement savings to cope with rising costs — an alarming trend as these savings are typically reserved for future security, not day-to-day expenses.

“This reliance on savings, combined with increased debt levels, is exacerbating the financial stress,” he said on Monday.

Bannon explained that a significant portion of the population in these regions is also taking on debt to meet monthly needs, a practice that is particularly pronounced among millennials and Gen X.

“While debt can temporarily provide relief, it creates a future burden with interest payments, which only adds to the cycle of financial instability,” he said. “This, in turn, limits individuals’ ability to save for their future or contribute to retirement plans, such as RRSPs.”

To help Manitobans and Saskatchewan residents rebuild financial stability, Bannon stressed the importance of financial planning and consultation with a professional. RBC’s service — My Advisor — he said, provides personalized financial advice, including budgeting, debt management and strategic savings planning. “The goal is to help individuals understand their current financial situation and develop a road map to achieve long-term financial goals.”

Moreover, Bannon emphasized that millennials, who are particularly stressed due to lower average incomes and high living costs, are more likely to reach out for financial resources. There are solutions, he added, that offer free resources, providing an accessible entry point for younger generations to understand their finances and make informed decisions.

Comparatively, concerns about unexpected expenses were especially acute in the Prairies.

“The region ranked second highest in the country, with 66 per cent of respondents saying they worry about not having enough to cover unexpected expenses, just behind Atlantic Canada at 67 per cent,” Bannon explained.

When it comes to maintaining their standard of living, 46 per cent of Prairie residents expressed slightly less concern than the national average of 48 per cent. Quebec had the lowest level of concern at 42 per cent.

“Rising costs are outpacing income for many residents. Forty-four per cent of respondents in Manitoba and Saskatchewan said they are finding it difficult to think about their financial future because they’re struggling to handle day-to-day expenses,” Bannon said. “That’s seven per cent higher than the national average and the second-highest in the country.”

For those relying on debt to manage daily expenses, Bannon recommended consulting an advisor to explore debt restructuring or consolidation options.

“This can prevent the cycle of debt accumulation and potentially uncover solutions, such as adjusting spending habits or rebuilding emergency savings,” he added.

The online poll was conducted by RBC from Nov. 1-5, 2024, with a total of 1,515 Canadians aged 18 years or older taking part.

It is deemed accurate within a margin of plus or minus 2.5 per cent at a 95 per cent confidence level. RBC stated the poll was balanced and weighted on age, gender, region and education, according to the latest census data, adding all respondents were members of the online Angus Reid Forum.

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