Economic Update

Canada's economic recovery after COVID has been difficult. A recent survey by Statistics Canada showed that 1 in every 3 households is facing financial difficulty because of increasing costs.

The following provides information and guidance to help navigate these challenging times.

Inflation

• Over the last two years, we have seen a great rise in prices of everyday essentials such as food, utilities, and gasoline.
• While inflation on food costs peaked earlier this year, global conflict may mean higher oil prices and increased costs for gasoline and other goods.
• With costs continuing to increase, it is important that families keep track of spending.
• Prepare a household budget and where possible, cut back or switch to cheaper providers.
• Don’t make impulsive or unnecessary purchases.
• If you need help with budgeting, the Economic Planning Board has financial navigators that can support.

Interest Rates

• In an effort to bring down inflation, the Bank of Canada has made a series of interest rate increases.
• Interest rates may remain high until next year, possibly beyond.
• Make it a priority to pay down debts, especially those at higher rates.
• Pay credit card bills on time to avoid large fees and interest.
• Don’t take on unnecessary debt during these uncertain economic times.
• Those with fixed-rate mortgages should prepare for higher payments upon renewal.
• If you need help with debt management, we have partnered with the Consolidated Credit Counselling Services of Canada who can provide free, confidential initial counseling. View the Resources for Financial Well-Being site for more information and for a direct phone number set up for the Jamat to get help.

Employment

• While our unemployment rate of 5.7% continues to be low by historical standards, the number of job vacancies has decreased over the past 6 months, as businesses in many sectors slow their hiring.
• Newcomers to Canada should make it a priority to learn English or French, and students should complete their secondary and post-secondary education, in order to be competitive.
• Micro-credentialling and skill upgrading through vocational training in skilled trades are also good career options.

Housing

• Despite a softening of the housing market in recent months, year-over-year, housing prices in most cities have continued to increase, with the average home now costing well over one million dollars in Toronto and Vancouver, and showing record highs in some areas of the Prairies.
• Rent prices continue to increase to record highs.
• If you are facing eviction, please ask for support via the ACCESS line.
• For those saving to buy a home, the Government of Canada offers The First-Time Home Buyer Incentive and The First Home Savings Account. You may also be eligible to receive tax credits and rebates.

Investments and Assets

• There will likely be continued volatility and risk in the global and Canadian economy.
• There has been a recent increase in fraud and cyber-crimes.
• Be cautious with investments in this uncertain climate.
• Be careful with schemes that promise high returns, even with someone you know.
• Never give your banking or private information over the phone or via text.
• Beware of imposters posing as representatives of the Canada Revenue Agency or collection agents.
• Build several months of your expenses as an emergency reserve.
• It is never too early to plan for your retirement. Use the Registered Retirement Savings Program (or RRSP) and the Registered Education Savings Plan (or RESP) where you can save for your children's education and receive government benefits.
• Consider a Tax-Free Savings Account.

In summary, Canadian households will likely continue to face challenges in the near future. Let us remain cautious and build smart spending and good savings habits.If you have questions or are seeking support, please contact the ACCESS line.