Canadians Living on the Edge with their Finances

Toronto, ON - With talk of a recession brewing south of the border, translating into an uncertain economic future for Canada, a new Ipsos Reid poll conducted on behalf of RBC finds that many Canadians are living on the edge when it comes to their finances and the amount of savings they have to weather a possible storm. Only one quarter (22%) of Canadians say that the current economic environment is impacting their savings habits to the extent that they are saving more than before, suggesting that an economic downturn could leave many with no financial reserves to cope with a downturn. On the flip side, just four in ten (37%) say they're spending less than before. Four in ten (43%) are spending the same amount as before, while two in ten (20%) are actually spending more.

• Quebecers (29%) are the most likely to say that they're saving more, followed by those in Atlantic Canada (22%), Alberta (22%), Saskatchewan and Manitoba (22%), and British Columbia (20%). Ontarians (18%) are the least likely to say that they're saving more, despite having been hardest hit by job losses in the manufacturing sector. Quebecers (42%) are also the most likely to indicate that they're spending less than before
• Younger Canadians, aged 18 to 34, are more likely to say that they're saving more (34%), compared to middle-aged (20%), 35 to 54, or older Canadians (14%), aged 55 and older.

Furthermore, the results of the poll reveal that only one half (49%) of Canadians indicate that they have a bank account that they keep funds in for a rainy day or emergency. Among those that do, a minority (45%) -- fewer than one quarter (22%) of Canadians total -- have enough socked away to cover three-months worth of expenses, and a majority (55%) - nearly three in ten (27%) Canadians total- only has enough saved to cover one-month worth of expenses or less.

• British Columbians are the most likely (54%) to indicate that they have money for a rainy day or emergency set aside in an account, followed by those living in Ontario (52%), Alberta (51%), Saskatchewan and Manitoba (47%), Atlantic Canada (46%), and Quebec (43%). Among those that do, residents of Saskatchewan and Manitoba (57%) are the most likely to have three-months expenses set aside, followed by those in B.C. (56%), Atlantic Canada (51%), Ontario (42%), Quebec (42%) and Alberta (36%).
• Six in ten (60%) older Canadians have money for this purpose set aside, with fewer middle-aged (47%) and younger Canadians (41%) indicating that this is the case. Among those that do, older Canadians (61%) are more likely than middle-aged (41%) or younger Canadians (25%) to have 3-months worth of expenses saved.

Perhaps with good reason, it appears that Canadians have some apprehensions about their financial situations. Eight in ten (83%) are worried they don't have enough saved, and nearly nine in ten (86%) feel they can't save as much as they would like.

With most Canadians not having enough savings to get them through an emergency of up to three months, the question arises as to how Canadians will cope with an unexpected emergency should it arise, such as a sudden illness or loss of a job. The answer for most appears to be enter into debt, with two thirds (65%) of Canadians agreeing (22% strongly/43% somewhat) that they consider their line of credit to be their emergency funds. As well, 60% of the approximately 3 million Canadians who keep at least $1000 in their bank accounts at all times say that this money represents their safety net.

Thinking about how they spend their paycheque, six in ten (63%) say that they put some money toward paying monthly bills, and the rest goes into savings. Three in ten (34%) say there is nothing left over to save after paying the bills, and only 3% say they can put all their income into savings.

Admittedly so, only 6% of Canadians say that they are `great' savers, and three in ten (29%) would call their saving skills `good', leaving most Canadians with either a `fair' (36%), `poor' (21%) or `terrible' (9%) self-assessment of their ability to save. But even with only one in three (35%) Canadians saying that they're at least `good' at saving, many are over-assessing their abilities with RBC's saver/spender index indicating that just one quarter (24%) of Canadians would be classified as `savers', according to their savings habits in different scenarios.

• Albertans, British Columbians, and those living in Saskatchewan and Manitoba are the most likely to think that they're at least `good' savers (38%), while those in Ontario (35%), Atlantic Canada (32%) and Quebec (30%) are less likely to think so.
• Older Canadians (45%) are more likely to say they're at least `good' savers, while middle-aged (30%) and younger Canadians (28%) to think so.

These are the findings of an Ipsos Reid poll conducted on behalf of RBC from 03/13 to 03/18, 2008. This online survey of 2,020 adult Canadians with at least one bank account was conducted via the Ipsos I-Say Online Panel, Ipsos Reid's national online panel. The results are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the actual Canadian population according to Census data. Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. An unweighted probability sample of this size, with a 100% response rate, would have an estimated margin of error of +/- 2.2 percentage points, 19 times out of 20.

For more information on this news release, please contact:
John Wright
Senior Vice President
Ipsos Reid
Public Affairs
(416) 324-2002
[email protected]

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Ipsos Reid is Canada's market intelligence leader, the country's leading provider of public opinion research, and research partner for loyalty and forecasting and modelling insights. With operations in eight cities, Ipsos Reid employs more than 600 research professionals and support staff in Canada. The company has the biggest network of telephone call centres in the country, as well as the largest pre-recruited household and online panels. Ipsos Reid's marketing research and public affairs practices offer the premier suite of research vehicles in Canada, all of which provide clients with actionable and relevant information. Staffed with seasoned research consultants with extensive industry-specific backgrounds, Ipsos Reid offers syndicated information or custom solutions across key sectors of the Canadian economy, including consumer packaged goods, financial services, automotive, retail, and technology & telecommunications. Ipsos Reid is an Ipsos company, a leading global survey-based market research group.

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