Over a third of Canadians say they’ve cancelled a major purchase because of higher prices, according to a survey by Nanos Research Group for Bloomberg News. That’s up from 23% in May 2022.

The poll underscores the financial pressure Canadian households are feeling because of the combination of high inflation and rising interest rates. It’s a trend that’s likely to continue as growth gears down: Most economists expect the country to enter a technical recession in the first half of 2023.

“This adds up to an emerging consumer spending chill,” Nik Nanos, founder of the polling firm, said by email. “Consumers are buckling up for an economic downturn in 2023.”

Price pressures are hitting younger consumers the hardest, the survey shows, with 50% of respondents aged 18 to 34 saying they’ve canceled a major purchase, compared with 23% for those 55 and older.

Households in Canada already have relatively high debt levels compared with many other developed countries — that’s a big reason why the economy is expected to slow more quickly than the United States in response to higher borrowing costs.

Poll respondents said they aren’t getting much help from their employers to ease the rising cost of living: 87% of employed Canadians said they received no special raise to offset inflation.

Inflation peaked in June at 8.1%, the highest since the early 1980s, and has since fallen to 6.8%. Average wages are up just over 5% in the past year.

The Nanos poll of 1,021 Canadians was conducted online and by telephone between Dec. 19 and 22 and has a margin of error of 3.1 percentage points.

Source: Financial Post