Canadians Are Spending 30% More Than Pre-Covid: New Report

According to a new report, Canadians spend 30 percent more than they did before the COVID-19 pandemic which started over two years ago, despite rising inflationary costs.

The report which was published by the Royal Bank of Canada (RBK) looked at aggregate spending across economic sectors and found households are now spending 35.63 per cent more per week than in 2019 and 30.72 per cent more per month.

During the first two weeks of April, the number of transactions at restaurants rose to 19 per cent, after hitting about 15 per cent above pre-pandemic levels, according to RBC. Grocery transactions also rose from 10 per cent to 17.8 per cent above 2019 rates.

Additionally, the report found that goods sales remained strong, driven by increases in clothing, furniture and grocery purchases while spending on travel and hospitality continues to surge back as the economic impact of the pandemic subsides.

The report comes shortly after the country’s March Consumer Price Index showed that the annual rate of inflation hit 6.7 per cent in March, the largest increase in over three decades. “Inflationary pressure remained widespread in March, as prices rose across all eight major components. Prices increased against the backdrop of sustained price pressure in Canadian housing markets, substantial supply constraints and geopolitical conflict, which has affected energy, commodity, and agriculture markets,” reads a section of the CPI.

Bank of Canada governor Tiff Macklem told reporters virtually on Thursday while in Washington, D.C that he wouldn’t rule out pushing rates beyond 50 basis points all in one sitting — after moving to lift rates by that amount to one per cent just last week — but said he “is prepared to be as forceful as needed.” 

Macklem also said it will take longer for inflation to recede due to the pervasiveness of supply chain disruptions, the war in Ukraine and the spike in COVID-19 cases in China.