A new poll has found that Canadians are focused on saving money and paying down debt, not spending, as the global pandemic drags on.
A poll conducted by Nanos Research Group found that three out of four Canadians say their top financial priority in 2021 is to pay down debt or grow their savings. Only 11% of respondents said they plan to make a major purchase this year.
During a massive economic downturn last year, Canadians became significantly better off financially because of income support payments from the government, surging real estate prices and stock-market gains.
The improved financial picture is fueling hope that households will go on a spending spree once the COVID-19 pandemic is over. Economic growth is seen surging above 5% in the second half of this year after a mid-winter slowdown, in large part on an expected surge in consumer spending.
Prime Minister Justin Trudeau’s government has implemented income and credit support programs to keep Canadian businesses and households afloat. As a result, average disposable income in the first nine months of 2020 was up about $100 billion over the same period in 2019 despite massive job losses, according to Statistics Canada.
Household spending, meanwhile, fell by more than $50 billion over that same time period. The net result is about $150 billion in new household savings that went unspent.
On top of the surge in savings, a housing boom has also made many Canadians wealthier on paper. Household net worth rose by more than $600 billion in the first six months of the pandemic, according to Statistics Canada.
Among people who responded to the Nanos poll, 39% said their top financial priority this year will be to pay down debt, while 37% said it would be to keep extra money in their savings account. About 13% said their top priority is to make a major investment, such as in real estate or the stock market.
The survey of 1,048 Canadians was taken between December 27 and 30 and has a margin of error of plus or minus 3 percentage points.
