Nearly 50% of Canadians couldn’t cover more than two months of expenses after a job loss, says new report

Nearly half of working Canadians feel less financially secure than a year ago, while 47 per cent could cover no more than two months of expenses after a job loss, according to a new report out Wednesday from Money Mentors conducted with Angus Reid.

“Canadians are not feeling better about their money, they’re not living their best financial lives,” said Stacy Yanchuk Oleksy, chief executive at Money Mentors, an Alberta-based, non-profit credit counselling and financial education agency. “We see a lot of Canadians are struggling, and I think it’s gotten worse post-pandemic … especially with cost of living … eating away at people’s budgets.”

Even among those in higher-income households earning $100,000 or more, more than one third said they could cover no more than two months of expenses if they lost their job. However, higher-income households might have more debt, such as through mortgages or auto loans. “If you’re making six figures, your lifestyle is probably going to be more expensive,” said Yanchuk Oleksy.

She added that $100,000 doesn’t have the same purchasing power today that it did 20 years ago.

In the past year, tariffs and inflation have raised everyday costs for Canadians, Yanchuk Oleksy said. Consumer prices climbed three per cent in August compared with the same month a year ago, according to the latest inflation data from Statistics Canada, with gas prices surging nearly 23 per cent.

Nearly one quarter of respondents in the report attributed higher costs for groceries, utilities, transportation and other everyday expenses as the main reason they feel less financially secure, as opposed to other reasons, such as housing costs, debt payments or reduced or uncertain income.

However, across generations, 30 per cent of generation Z workers said they feel more financially secure than a year ago, compared with 16 per cent of millennials, 14 per cent of generation X and 14 per cent of baby boomers who said the same in the report.

That said, only 29 per cent of gen-Z workers could cover six months or more of expenses following a job loss, compared with nearly half of boomers, according to the data.

Yanchuk Oleksy said a higher proportion of younger working Canadians likely feel more financially secure because they tend to have fewer fixed expenses, compared with many millennials, for example, who are likely dealing with homeownership and child-care costs.

She added that the generational differences could look very different if non-working Canadians were to be surveyed as well, given Canada’s higher youth unemployment rate .

Working Canadians in some provinces are feeling this deterioration in their financial security more than other parts of the country, according to the Money Mentors report. For example, about 64 per cent of respondents in Atlantic Canada and 62 per cent of respondents in Alberta reported feeling less financially secure than they did a year ago, compared with 49 per cent in British Columbia and Ontario, respectively, 48 per cent in Saskatchewan, 46 per cent in Manitoba and 38 per cent in Quebec.

Yanchuk Oleksy said that Newfoundland and Labrador has a higher unemployment rate compared with other provinces, while Alberta has a more “volatile” job market, largely dependent on the oil and gas industry.

She said Albertans are more likely to own vehicles and carry more debt, compared with other households across Canada, which can leave less room for building a savings cushion.

• Email: slouis@postmedia.com