A new report by Statistics Canada says Canadians plan to reduce discretionary spending during the recovery period of the COVID-19 pandemic.
The study “Expected changes in spending habits during the recovery period,” is based on results from a recent web panel survey conducted in June, looking at how spending habits may change.
“Canadians were less likely to signal a change to spending on more essential items. For example, 87 per cent of respondents reported that they would spend the same on housing, compared with 8 per cent who said that they would spend more and 5 per cent who said that they would spend less,” said the report.
“In general, respondents planned to spend less rather than more on some discretionary items. For example, half of the respondents to the panel survey said that they planned to spend less money eating at a restaurant. Additionally, about one-third planned to spend less on entertainment, clothing or apparel, recreation, or ordering take-out food.
“Conversely, while most respondents said that they expected to spend about the same on groceries, almost one-fifth (19 per cent) expected to spend more, while 10 per cent said that they would spend less.”
The federal agency said financial conditions are related to expected changes in spending habits.
“Among people who reported that their income was not sufficient to meet their household expenses, 52 per cent reported that they would spend less on clothing or apparel, and 46 per cent said that they would spend less on recreation. At the same time, those who faced financial difficulties were more likely to report that they expected to spend more on essential items, such as housing,” said StatsCan.
“Health concerns also played an important role in expected spending, particularly discretionary items such as eating at a restaurant. For example, among those who reported that they were very concerned about the health risks of going to restaurants and bars, 67 per cent said that they would spend less on eating at a restaurant, compared with 29 per cent among those who reported that they were not at all concerned.”
The report also said Canadians aged 15 to 34 were more likely than those aged 35 and older to expect to spend more on recreation and entertainment.
“Higher expected spending on recreation and entertainment among younger people might reflect a higher degree of pent-up demand among this age group and an expectation that the job market will improve with the reopening of the economy. It might also reflect the fact that younger people were less likely than older people to express concerns about the health risks of reopening the economy,” added Statistics Canada.
“Immigrants were generally more likely than Canadian-born individuals to report that they would spend less on a number of items. Specifically, immigrants were more likely than Canadian-born individuals to expect to spend less on eating at a restaurant (63 per cent versus 48 per cent), transportation (39 per cent versus 25 per cent), recreation (43 per cent versus 29 per cent), saving and investing (29 per cent versus 15 per cent), and clothing or apparel (42 per cent versus 30 per cent). These results reflect earlier findings that showed that immigrants were more likely to report being financially impacted by the pandemic.”
