Nearly half of Albertans say they're worse off than a year ago, according to poll

When Byron Work moved with his wife and two young children from Calgary to Okotoks last November, he expected a higher monthly mortgage payment. 

But with a variable mortgage, and the Bank of Canada continuing to raise interest rates to curb inflation, his payments just kept going up. 

"It got to the point that it's more than I could afford," he said. "It's getting a little scary out there." 

To make ends meet, Work began to dip into his savings. His wife went back to work, taking on two part-time jobs. 

Work's situation is not unique. About a quarter of Albertans are feeling stressed about their financial situation and not expecting a break in the near future as costs mount, from food to housing. 

On Monday, the non-profit Angus Reid Institute published polling data showing that almost half of Albertans said they are financially worse off than they were a year ago. Additionally, 27 per cent of the 237 Albertan responders said they expected their financial troubles to continue in the coming year.

Still, the recent poll, which surveyed 2,800 Canadians, found that what's happening in Alberta is playing out across the country, as roughly a third of Canadians are pessimistic about their immediate economic futures. 

When seen on a graph over time, the percentage of Canadians feeling anxious about their financial outlook has been trending upward since the start of the COVID-19 pandemic.

"We have not seen this level of sustained anxiety that's lasted at the rate that it has over two years," said Shachi Kurl, president of the Angus Reid Institute.

"That gulf between the number who say they will be better off a year from now relative to those who say they will be worse off a year from now is really widening, and it's quite significant."

At a glance, those who were older and owned their homes reported less financial stress, the data shows. On the other hand, Canadians with young children, who either rented or paid a mortgage, were much more likely to be struggling.

"That future-looking anxiety is something that continues to really mark the mood of Canadians," Kurl said. 

"We've seen this for a while now, but it is a sentiment that is persisting." 

Another rate hike coming this week?  

Charles St-Arnaud, chief economist with Alberta Central, said that as long as wages continue to underperform inflation, Albertans will continue to struggle with their purchasing power.

"I have a feeling it will take years before we get back to where we were pre-pandemic," he said. 

The Bank of Canada is slated to make its next interest rate decision this week. However, Arnaud is among many experts who think the central bank will extend its pause on rate hikes, which it began earlier this year. 

He said the Bank of Canada, which has aggressively raised interest rates to 4.5 per cent from 0.25 per cent since last March, faces a tricky balancing act in its quest to wrangle inflation by pumping the brakes on the economy.

Because despite the months of rate hikes, the country's economy is still growing, according to first-quarter figures from Statistics Canada. 

"We will need to create slack in the economy, slower economic growth," St-Arnaud said. "We will need to see a slowdown in the labour market — not necessarily seeing job losses, but not as much job creation, adding less pressure on wages to kind of create a more sustainable inflationary path."

One sign of struggle in Alberta, he said, is the level of insolvencies, which is now above what it was before the pandemic. 

While banks and financial institutions are willing to readjust loan criteria amid the strong labour market, St-Arnaud fears the central bank might raise rates too quickly, leading to a shock in the system, job losses and a snowballing problem. 

"Because if suddenly a household that needed two incomes to service a debt suddenly only has one, there'll probably need to default on some of their obligations," he said.

The knob turning by central bankers in their pursuit to subdue inflation is being felt by Alberta families. Many, like Work's, are clocking more hours to compensate. But they're still seeing their purchasing power shrink as food and energy prices climb with inflation, which was at 4.4 per cent in April. 

While Work said he's happy with his job and new home in Okotoks, the contours of life for his family have shifted.

"A year or two ago, it was a little more comfortable," he said. "Now, it's just work, work work. We just have to keep working."