It has not been an easy year for Canadians financially.
Decades-high inflation and soaring interest rates have led many to take a closer look at their spending habits and, consequently, make some tough choices.
On Wednesday, the Bank of Canada hiked its key interest rate for the seventh time in a row, bringing it to 4.25 per cent – the highest it’s been since January 2008.
The central bank’s aggressive rate hike cycle, which began in March, is in response to Canada’s drastically high inflation rate. After peaking at 8.1 per cent in July, the annual inflation rate has slowed to 6.9 per cent in October – still well above the Bank of Canada’s target rate of two per cent.
These economic trends are affecting everything from gas prices to grocery bills to mortgage payments.
And in an effort to cut costs, Canadians coast-to-coast are making sacrifices and changes to their lifestyle.
‘A real kick in the face’: First-time homeowners face mortgage crunch
Former Olympic wrestler Colin Daynes and his partner, mixed martial arts fighter Lupita (Loopy) Godinez, describe paying eight per cent interest on the mortgage for their new condo as “a real kick in the face.”
The pair secured the financing they needed to buy their first home together just a few weeks ago after a stressful, months-long search coinciding with rising inflation and interest rates.
They closed on their one-bedroom unit in a newly built condominium in Burnaby, B.C. on Nov. 28.
“It’s a beautiful view. I love it,” said Daynes.
The couple’s offer to buy the condo was accepted at the end of July and their first broker indicated they might pay interest of around 4.5 per cent, Daynes said.
The 48-year-old wrestled for Canada at the 1996 Olympics and now works in the film industry, while Godinez competes in UFC bouts.
Daynes said they both earn “good money” and they’re putting at least $200,000 down on a $525,000 condo, so thought it wouldn’t take long to secure financing.
It ended up taking three months and two mortgage brokers, while interest rates rose in the meantime.
After two months without success, he said they switched brokers and ended up securing a mortgage through a non-bank lender at 7.99 per cent. He said Godinez’s income from fighting doesn’t follow a typical weekly schedule, which may have been an issue for some lenders.
“With all the stress and headache that we went through to get a mortgage, we’re really just signing on to make the transaction.”
He said they will be free to search for a better rate once 90 days have passed.
Daynes said it doesn’t make sense that it was so hard for them to secure financing for an entry-level condo given their earnings and substantial down payment.
“If we’re having a hard time borrowing $300,000, what kind of situation is everybody else in?”
— By Brenna Owen in Vancouver
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‘There’s no big fix for all this’: Ottawa resident bakes bread to save dough
The price of a loaf of bread at grocery stores these days is too much to justify for Ottawa resident Jeff Lowe.
So, he’s brought out the baking supplies.
“Instead of $5 for a loaf of bread, I’m making bread,” he said.
Lowe said he can bake about three loaves of bread for the price of one at a grocery store.
In the face of decades-high food inflation, he and his wife are finding ways to trim their grocery bills.
From baking their own bread to buying cheaper cuts of meat, Lowe said they’re doing what they can to limit wasteful spending.
“We’re not cutting our grocery bill in half, but we’re cutting out all the surplus,” he said.
The cost of food been rising at the fastest pace in decades. In October, grocery prices rose 11 per cent compared with a year ago, down slightly from 11.4 per cent a month prior.
And food prices are expected to continue rising next year.
According to the 13th edition of Canada’s Food Price Report released Monday, the total cost of groceries for a family of four is expected to be $1,065 more in 2023 than it was this year.
In the meantime, Lowe will be making more frequent trips to the grocery store, looking for savings and ways to keep his budget in check.
“There’s no big fix for all 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 student stays local for the holidays
Sarah Jourdain typically heads back home to the Dominican Republic for the holidays.
But the international student, who has been living in Montreal for the past four years, said the costs are too high for her to justify the travel this year.
When looking for a plane ticket last month, Jourdain said she was shocked to find prices for the normally $500 round-trip flight had skyrocketed to around $1,200.
It is generally advised to purchase an international plane ticket from Canada two months in advance of a departure, yet two months out, Jourdain said she was still met with unprecedented high prices.
“Given that [the Dominican Republic] is a very touristy location, you would always find tickets under $1,000,” said Jourdain.
Jourdain said she knows a number of other international students opting to not go home this holiday season because of the pricey plane tickets and overall increased cost of living.
Many students have other day-to-day expenses to consider before travelling internationally, Jourdain said.
“Travelling would be a luxury at this point,” she said.
Instead of celebrating the holidays abroad, Jourdain will stay in Montreal and spend time with extended family and friends.
She plans to make her next trip home outside of a peak travel time.
— By Caitlin Yardley in Montreal
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‘Everything is expensive here’: Mom of two adjusts to life in Canada
Misha Subramanyam wishes she could further indulge 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 can’t consider visiting others. Maybe next year they’ll get a membership for the Art Gallery of Ontario. Last year, they had one for Ripley’s Aquarium of Canada.
“It’s not like we can go to all of them at the same time,” said the stay-at-home mom of two.
“My son keeps asking to go back to the aquarium and I’m like ‘No. We’re not paying. Our membership’s over so forget about the fishes.'”
Clothes and groceries also have less room in the budget for the family of four, who moved to Toronto from Brisbane, Australia in February 2020.
Subramanyam said Toronto was more expensive than Brisbane to begin with and expenses rose further over the past year, with the cost of dairy products a particular blow for her mostly vegetarian household.
“Just to buy a box of yogurt would be like five bucks,” says Subramanyam. “I make a big pot now.”
She said they’ve come to terms with “the fact that everything is expensive here, starting with kids clothes.”
“(We’re) definitely buying less … I can’t remember buying anything for myself this season. I just decided to concentrate on the kids and what they need.”
She’s continued swimming, skating and flute lessons for her nine-year-old, fearing that otherwise “he would miss out.”
But Subramanyam said he did not get a big birthday bash this year, daycare for her 15-month-old son is on hold until she finds a $10-a-day spot and a hoped-for family trip to her native India this winter is postponed to the spring.
— By Cassandra Szklarski in Toronto
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‘It’s influenced me to travel less, or visit home less’: Montreal resident makes fewer trips to see family
When Craig Fisher moved to Montreal in August 2021 after living in Winnipeg for a decade, he was eager to make regular visits to family in London, Ont.
At first, he expected to make the trip about once a month. But now that inflation has sent transportation costs skyrocketing, he said those trips are becoming less frequent.
“I do consider inflation to be a big factor,” the 31-year-old said during a layover between the two cities at Toronto’s Union Station. “It’s influenced me to travel less, or visit home less.”
It’s also changed how he gets there.
The first few trips, he took a plane. He was able to cash in on one-way budget airfares between Montreal and Toronto, sometimes for as low as $70. But as inflation started to take hold of the economy and travel restrictions lifted, he said those affordable airfares dwindled.
Air travel recorded the most dramatic year-over-year transportation-related inflation increase, jumping 18.5 per cent in October compared with a year ago.
When air travel no longer seemed viable, Fisher said he opted to drive his car. But then the increase in gas prices – a 17.8 per cent jump between October 2021 and 2022 – dissuaded him.
Finally, he decided to start making the trip by bus in early 2022. Since then, he said the cost has remained relatively flat. But, these days, he’s noticed an increase in ridership.
“I think that just goes along with people doing what I’m trying to do; save a little money while getting to the place they need to be.”
— By Jordan Omstead in Toronto
This report by The Canadian Press was first published Dec. 9, 2022.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
