If you’ve noticed your paycheque doesn’t go as far as it used to, you’re not alone. A new survey from Harris & Partners reveals that six in ten Canadians say they’re financially worse off today than they were in 2020. Even more concerning, nearly nine in ten report that everyday essentials—like groceries, rent, and utilities—have become harder to afford in the past year.
These numbers confirm what many households are already feeling: the rising cost of living in Canada is squeezing budgets, while wages aren’t keeping up. In this article, we’ll look at what’s driving higher expenses, how financial stress is impacting Canadians, and what steps can help ease the pressure.
Jump to:
- Are Canadians struggling financially?
- Why is the cost of living rising in Canada?
- Are incomes keeping up with the cost of living?
- What should I do if I’m struggling financially?
Are Canadians struggling financially?
Yes, and it’s showing up across age groups and regions. In our survey, 60.7% of respondents say they’re worse off than in 2020, and 89.4% report that essentials are harder to manage in the past 12 months. National surveys point the same way: in spring 2024, 45% of Canadians said rising prices were greatly affecting their ability to meet day-to-day expenses, up from 33% two years earlier.
This data confirms what many households feel every month: budgets are tighter, financial stress is rising, and the cost of living in Canada is outpacing what many incomes can comfortably cover.
Why is the cost of living rising in Canada?
The rising cost of living in Canada is being driven by several factors that affect everything from grocery bills to housing and utilities. One of the biggest contributors is inflation, which is currently above the Bank of Canada’s 2% target and has been for the past few years. Other factors impacting the rising cost of living include:
Rent: Housing remains one of the toughest challenges. Average rents have climbed steadily, and in 2024, rent increases outpaced wage increases. Low vacancy rates also mean tenants have little room to negotiate, particularly in cities like Toronto and Vancouver.
Groceries: Food prices were predicted to rise by up to 5% in 2025. For a family of four, that could mean paying over $801 more per year on groceries. Several factors are behind the trend, including climate change, supply chain challenges, severe weather, and international crop failures.
Childcare: For families, childcare adds another layer of financial pressure. In 2023, the average cost for full-time childcare in Canada was $544 per month. While the federal $10-a-day plan is starting to bring fees down in some provinces, it can still be unaffordable, depending on where you live.
Utilities: Energy costs fluctuate with global markets, but the overall trend shows prices climbing. In fact, the Energy Information Agency (EIA) predicts residential electricity prices in some regions could rise by 13% to 18% by the end of 2026, putting continued pressure on everyday Canadians.
Healthcare: Even healthcare is becoming more expensive. National health spending has been growing by 4–6% annually, with many costs passed on through insurance premiums and out-of-pocket expenses.
Together, these pressures paint a clear picture: the cost of living in Canada is climbing across multiple fronts. While some policy changes, like the childcare subsidies, offer relief, households continue to juggle rising expenses in nearly every aspect of daily life.
“We are seeing a pattern where rising prices are outpacing income growth, and people are being forced to make increasingly difficult choices. It is not about cutting back on luxuries anymore; it is about whether you can cover rent, keep the lights on, and put food on the table.” Joshua Harris
Are incomes keeping up with the cost of living?
In short, no. While wages in Canada have risen in recent years, they haven’t kept pace with the sharp increases in housing, food, and other essentials. Average hourly wages grew by about 5% in 2024, but with major household costs climbing across the board, Canadian families are falling behind. For many households, this widening gap between income and expenses is why saving feels harder, debt is growing, and financial stress is at an all-time high.
Did you know? Almost 37% of Canadians have skipped meals or essentials just to make ends meet. If you’re struggling to keep on top of your finances and are dealing with mounting debt, speak to a Licensed Insolvency Trustee today.
What should I do if I’m struggling financially?
If rising costs are making it harder to manage your budget, there are steps you can take to regain some control. The earlier you act, the easier it is to prevent small issues from snowballing into bigger financial challenges.
1. Review your expenses in detail
Start by tracking where your money is going each month. Break spending into categories like housing, groceries, utilities, transportation, and discretionary items. Even small adjustments—like switching to a lower phone plan, cutting unused subscriptions, or meal planning before shopping for groceries—can free up extra cash.
2. Explore government supports and benefits
Federal and provincial programs can help ease financial pressure. Examples include the GST/HST credit, the Canada Child Benefit, housing subsidies, and targeted energy rebates. Checking eligibility through official portals such as the government’s benefits finder can help you access support you may not know you qualify for.
3. Communicate with lenders and service providers
If you’re worried about falling behind on bills, reach out early. Banks, credit card companies, and utility providers often have hardship programs, flexible payment plans, or the option to defer payments temporarily. Taking the initiative shows willingness to work with them and can reduce stress.
4. Seek professional financial guidance
When debt becomes overwhelming, reaching out for debt help in Canada can make all the difference. Speaking with a Licensed Insolvency Trustee (LIT) or a non-profit credit counselling agency gives you access to professional advice and proven debt relief options. From debt management plans to consumer proposals, these experts can assess your situation and guide you toward a clear, realistic path to becoming debt-free.
Find financial help today
If the rising cost of living has left you feeling overwhelmed, you’re not alone. More and more Canadians are facing financial pressure, whether it’s due to mounting debt, reduced income, or simply trying to keep up with everyday expenses.
At Harris & Partners, our Licensed Insolvency Trustees have been helping individuals and business owners across Canada find real, lasting solutions to their financial challenges. Whether you’re exploring a consumer proposal, considering bankruptcy, or just need expert advice on how to manage your debt, we’re here to help. We’ll take the time to understand your unique situation and guide you through every step with compassion, professionalism, and respect. There’s always a path forward, and it starts with a simple, confidential conversation.
Contact us today to book your free consultation.
This survey was conducted by Harris & Partners in August 2025 and includes responses from 1,210 Canadians aged 18 and older. The survey aimed to explore how financial pressures, wage trends, and economic instability are affecting Canadians’ wellbeing and daily decisions.
