From missing family time to making food, Canadians are cutting back amid inflation

MONTREAL – It hasn’t been an easy year for the Canadians financially.

Decades of high inflation and rising interest rates have caused many to take a closer look at their spending habits and consequently make some difficult decisions.

On Wednesday, the Bank of Canada raised its interest rate for the seventh straight month to 4.25 percent – the highest since January 2008.

The central bank’s aggressive rate-hike cycle that began in March is a reaction to Canada’s soaring inflation rate. After peaking at 8.1 percent in July, the annual inflation rate slowed to 6.9 percent in October — still well above the Bank of Canada’s target rate of 2 percent.

These economic trends are affecting everything from gas prices to grocery bills to mortgage payments.

And to cut costs, Canadians are making sacrifices and changing lifestyles from coast to coast.

‘A real kick in the face’: First-time homeowners face a mortgage crisis

Former Olympic wrestler Colin Daynes and his partner, mixed martial artist Lupita (Loopy) Godinez, describe paying 8 percent interest on the mortgage on their new condo as “a real kick in the face.”

The couple just weeks ago secured the financing they needed to buy their first home together after a stressful month-long search that coincided with rising inflation and interest rates.

They closed their one bedroom unit in a newly built gated community in Burnaby, BC on November 28th.

“It’s a beautiful sight. I love it,” said Daynes.

The couple’s offer to buy the condo was accepted in late July and their first agent said they might pay interest of around 4.5 percent, Daynes said.

The 48-year-old fought for Canada at the 1996 Olympics and now works in the film industry while Godinez competes in UFC fights.

Daynes said they’re both making “good money,” investing at least $200,000 on a $525,000 condo, so she figured it wouldn’t take long to secure funding.

It ended up taking three months and two mortgage brokers, while interest rates rose in the meantime.

After two months of no success, he said, they switched brokers and eventually secured a 7.99 percent mortgage through a non-bank lender. He said Godinez’s income from fights doesn’t follow a typical weekly schedule, which may have been a problem for some lenders.

“With all the stress and headaches we went through to get a mortgage, we’re really just signing to complete the transaction.”

He said they are free to look for a better plan after 90 days.

Daynes said it doesn’t make sense that given her income and sizable down payment, it was so difficult for her to secure financing for an entry-level condo.

“If we’re having a hard time borrowing $300,000, what’s the situation for everyone else?”

— By Brenna Owen in Vancouver

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‘There’s no big fix’: Ottawa resident bakes bread to save dough

The price of a loaf of bread in grocery stores these days is too high for Ottawa resident Jeff Lowe to justify.

So he brought out the baking supplies.

“Instead of $5 for a loaf of bread, I make bread,” he said.

Lowe said he could bake about three loaves of bread for the price of one at a grocery store.

In the face of decades of food inflation, he and his wife find ways to cut their grocery bills.

From baking their own bread to buying cheaper cuts of meat, Lowe said they’re doing everything they can to limit wasteful spending.

“We’re not halving our grocery bill, but we’re cutting all the excess,” he said.

Food prices are rising at the fastest rate in decades. In October, food prices rose 11 percent year-on-year, down slightly from 11.4 percent in the previous month.

And food prices are expected to continue rising next year.

The total cost of groceries for a family of four is expected to be US$1,065 more in 2023 than this year, according to the 13th edition of Canada’s Grocery Prices Report, released Monday.

In the meantime, Lowe will be heading to the grocery store more frequently to look for savings and ways to keep his budget in check.

“There’s no one big fix for all of this,” Lowe said. “It’s small wins.”

— By Nojoud Al Mallees in Ottawa

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“Travelling would be a luxury at this point”: International students stay on site during their holidays

Sarah Jourdain usually drives home to the Dominican Republic for the holidays.

But the international student, who has lived in Montreal for four years, said the cost was too high for her to justify traveling this year.

When Jourdain was looking for a plane ticket last month, she said she was shocked to find that round-trip fares had skyrocketed from the usual $500 to around $1,200.

It’s widely recommended to buy an international plane ticket from Canada two months before departure, but two months later, Jourdain said she was still faced with unprecedentedly high prices.

“Given that [the Dominican Republic] is a very touristy place, you would always find tickets under $1,000,” Jourdain said.

Jourdain said she knows a number of other international students who have chosen not to go home this holiday season because of expensive plane tickets and the overall increased cost of living.

Many students have other day-to-day expenses to consider before traveling internationally, Jourdain said.

“Travel would be a luxury at this point,” she said.

Rather than celebrating the holidays abroad, Jourdain will remain in Montreal and spend time with extended family and friends.

She plans to take her next trip home outside of the peak tourist season.

— By Caitlin Yardley in Montreal

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“Everything is expensive here”: Mother of two gets used to life in Canada

Misha Subramanyam wishes she could continue living her nine-year-old son’s love of museums and art galleries.

The Toronto-based graphic designer said her family has an annual membership to the Royal Ontario Museum to make it more affordable, but couldn’t consider visiting others. Maybe they’ll get a membership in the Art Gallery of Ontario next year. Last year they had one for Ripley’s Aquarium of Canada.

“It’s not like we can go to everyone at the same time,” said the stay-at-home mom of two.

“My son keeps asking if he can go back to the aquarium and I’m like, ‘No. we don’t pay Our membership is over, so forget the fish.’”

Clothing and groceries also have less space in the budget of the family of four, who moved to Toronto from Brisbane, Australia in February 2020.

Subramanyam said Toronto was initially more expensive than Brisbane and spending has continued to rise over the past year, with the cost of dairy taking a particular hit on her mostly vegetarian household.

“Buying just a box of yogurt would cost five dollars,” says Subramanyam. “I’m making a big pot now.”

She said they’ve come to terms with “everything is expensive here, starting with children’s clothes.”

“(We) are definitely buying less… I don’t remember buying anything for myself this season. I just decided to focus on the kids and what they need.”

She continues to take swimming, ice skating, and flute lessons for her nine-year-old because she fears “he’s going to be left out.”

But Subramanyam said he didn’t get a big birthday party this year, daycare for her 15-month-old son is suspended until she finds a place for $10 a day and a hoped-for family trip to her native India this winter has been postponed until spring .

— By Cassandra Szklarski in Toronto

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“It made me travel less or go home less”: A Montreal resident travels less to visit family

When Craig Fisher moved to Montreal in August 2021 after living in Winnipeg for a decade, he was keen to visit his family in London, Ontario regularly.

Initially, he planned to make the trip about once a month. But now that inflation has pushed up transportation costs, he said those trips are becoming less frequent.

“I think inflation is a big factor,” the 31-year-old said during a stopover between the two cities at Toronto’s Union Station. “It made me travel less or go home less.”

How he gets there has also changed.

He took his first trips by plane. He was able to redeem cheap one-way plane tickets between Montreal and Toronto, sometimes for as little as $70. But as inflation gripped the economy and travel restrictions were lifted, he said those affordable fares shrank.

Air travel saw the most dramatic year-on-year rise in transport-related inflation, rising 18.5 percent year-on-year in October.

When air travel seemed no longer viable, Fisher said he chose to drive his car. But then the rise in gas prices — a 17.8 percent jump between October 2021 and 2022 — threw him off.

Finally, he decided to start the journey by bus in early 2022. Since then, costs have remained relatively low, he said. But these days he has noticed an increase in ridership.

“I think that just comes with people doing what I’m trying to do; Save a little money while getting to where they need to be.”

— By Jordan Omstead in Toronto

This report from The Canadian Press was first published on December 9, 2022.

The Canadian Press