85% of Canadians now live ‘paycheque to paycheque’, say rising costs are making saving impossible, according to a survey released on Wednesday by H&R Block Canada, a tax preparation firm. That’s a sharp rise from 60% who felt the same in 2024.
With inflation rising, wages stuck, and personal savings running dry, many are feeling more financially stretched than ever.
Indian immigrants feel the strain
What does this mean for Indian immigrants living in Canada, or those planning to move? The pressure is already visible.
Commenting on the survey, Darshan Maharaja, a Canada-based immigration analyst told Business Standard, “Cost of living has increased a lot in the last 3 years, while incomes have not kept pace with inflation. Recently released data shows that in the past 10 years, inflation-adjusted per capita GDP has increased by only 0.5% total.” “Immigrants living in Canada, many of whom were already at a financial disadvantage, are feeling the brunt of a bad economy,” he said.
In 2024, the Angus Reid Institute had flagged that housing and basic living costs were hitting recent immigrants the hardest.
“Many recent immigrants are leaving the country because of the high cost of living, which could harm Canada’s reputation as a welcoming place for newcomers,” the institute’s data showed.
By November 2023, 62,410 international students or graduates from India had become permanent residents, according to data from Immigration, Refugees and Citizenship Canada (IRCC). This group now represents the largest source of permanent residency applicants in the country.
At the same time, many are having second thoughts. Statistics Canada data, cited by the Angus Reid Institute, suggests that over 15% of immigrants leave Canada within 20 years of arrival. Less than half of permanent residents go on to become Canadian citizens.
There’s also a visible shift among international students. More of them are now considering leaving Canada, citing unaffordable living and poor job prospects.
A closer look at the H&R Block Canada findings
The survey conducted by H&R Block Canada outlines why so many are feeling financially stuck. Here’s what it shows:
— 85% of Canadians feel that living paycheque to paycheque is the “new normal”
— 81% worry that their income isn’t keeping up with the rising cost of living
— 74% say they’re not saving enough money
— 62% say they don’t have enough left over after each paycheque to build savings
— 78% think they’ll have even less to put into savings in 2025
— 46% say they cannot save for retirement or a home
— 33% say they’ve given up on owning a home and prefer to spend money on short-term pleasures
“While many Canadians hold a mix of tax-friendly savings accounts, it’s clear that Canadians are feeling the financial strain of not having enough money left from their paycheque to put into savings, given the high cost of living,” said Yannick Lemay, tax expert at H&R Block Canada.
Unexpected costs push people into debt
The report also found that many Canadians rely on credit cards or payment plans when faced with large or sudden expenses.
— 48% use credit cards for large purchases rather than draw from savings
— 17% use buy now, pay later services
— 56% say they’d go into debt or use credit for surprise costs like home repairs, dental bills or replacing appliances
The future outlook, too, is worrying. With US-Canada trade tensions adding uncertainty to the economic picture, 78% of Canadians think their ability to save will worsen in the coming months.
“According to an estimate by the OECD, the Canadian economy will be the worst performer in the G7 for the next 10 years. Those planning to move to Canada would be well-advised to consider other countries to move to,” Maharaja suggested.
There are around 1.86 million people of Indian origin in Canada, according to the 2021 census. With growing financial uncertainty, more of them could be feeling the squeeze.