As of July 2022, Statistics Canada reported a 7.6 per cent rise in the Consumer Price Index over a 12-month period. This steep rise has placed pressure on many consumers as their budgets failed to account for the sudden rise in prices. Food prices have been increasing at a hastening pace. Comparing the prices during July 2021 to that of July 2022, an increase of 9.9 per cent was observed, slightly overtaking June’s 9.4 per cent.
While some expenses have remained the same, shoppers have reported a strain on their budget due to increasing prices of certain essential goods.
The effect of inflation is felt by many. Monica Belyea, a parent in the GTA, states in an interview with CBC that her weekly food budget “doesn’t take me to the end of the week anymore.” Belyea says that after spending more on necessities, “I just don’t have as much money to go around.”
The economy is struggling against the effects of Covid-19, labour shortages, and recession forecasts. An increasing number of university students are experiencing rising costs of living and consequently, budget crunches. For many students, this means that their savings do not go as far as covering the combined costs of tuition, housing, food, and textbooks.
Hannah Sullivan Facknitz, a graduate student at the University of British Columbia, told CTV News that the effects of inflation are felt all over their small apartment. As a disabled student whose budget must include health expenses, Facknitz said, “I’m managing and surviving just by the skin of my teeth, despite getting a really, really good job that pays really well.” Facknitz’s experience is a harsh reality for many Canadian students who are scrambling to make ends meet.
Many international students invest in a Canadian education to pursue better opportunities. However, high inflation is challenging this decision. International students who lack access to support systems face additional obstacles, such as a complicated and expensive process to apply for Permanent Residency in Canada, difficulty in securing employment opportunities, and higher tuition fees.
“What’s becoming more and more prevalent is necessities versus luxuries,” says senior investment advisor with BMO Private Wealth David Boyd in an interview with The Toronto Star. He recommends students to consider getting a job and to join loyalty programs, both of which could help reduce the financial stress of inflation.
The Stressed by the Bell survey conducted in 2022 uncovered that some Canadians are afraid of accumulating debt while completing their education. The survey interviewed 1,508 Canadians, finding that 30 per cent of parents and 38 per cent of post-secondary students are fearful that they will need to carry on debt to pay for the upcoming school year.
Some retailers are taking note of consumer budgets this year, adjusting as necessary to meet consumer expectations. Notably, Staples will be lowering prices on their 50 top-selling items, while Walmart Canada will be implementing price rollbacks on back-to-school items “to help customers navigate this time of inflation.”
Apart from relying on deals from retailers, financial experts advise consumers to avoid duplicate purchases by reusing items whenever possible. They also suggest holding off on less urgent purchases until October, as stores will be clearing back-to-school inventories by then, likely resulting in discounts.
Other tips include comparing store prices to get the best deal, using coupon-code apps, and looking into community programs that provide free or discounted supplies. Canadian Savings Group is a website where deal-seeking experts share grocery coupons and specials. In the past two months, they have gained 6,000 followers, putting their Facebook follower count past 100,000.
Matthew Shay, president and Chief Executive Officer of the National Retail Federation, states in an interview with Global News, “[Consumers] are cutting back on discretionary spending, shopping sales and buying store or off-brand items to purchase what they need for the upcoming school year.”
Due to the effects of inflation, back-to-school products and essential goods have become more expensive. As of now, all there is for Canadian students and parents to do is to practice being smart consumers and to be patient that other companies will follow in supporting students and parents struggling with finances.