Rising costs of living put increasing pressure on household finances across Canada
A new survey from H&R Block Canada reveals a sobering financial reality for many Canadians: 85% of respondents say they are living paycheque to paycheque in 2025, a steep increase from 60% reported in a similar study conducted in 2024.
The findings underscore a growing sense of financial instability and highlight how inflation, rising interest rates, and the cost of everyday essentials are making it more difficult for Canadians to save or plan for the future.
What Does “Living Paycheque to Paycheque” Really Mean?
The term refers to individuals whose income is just enough to cover their regular monthly expenses — rent or mortgage payments, groceries, utilities, and transportation — with little to no room for savings or emergencies.
In practical terms, this means that a missed paycheque, an unexpected bill, or even a modest increase in expenses could push many Canadians into debt or financial crisis.
Sharp Increase from 2024 to 2025
The jump from 60% in 2024 to 85% in 2025 is significant. It suggests a rapid deterioration in financial confidence and capacity for savings among Canadians, even when compared to just one year ago.
According to Peter Bruno, President of H&R Block Canada, the results “paint a stark picture of the financial strain many Canadians are feeling right now.” He emphasized that many households are struggling not only with rising day-to-day expenses, but also with managing debt and building financial resilience.
What’s Behind the Growing Financial Pressure?
Several economic factors are contributing to this increased financial strain:
- Cost of Living: From groceries to rent to gas, basic expenses have risen significantly in recent years.
- Interest Rates: Higher borrowing costs have made mortgages, credit card payments, and personal loans more expensive.
- Wage Growth Lagging Behind: While wages have increased in some sectors, they have not kept pace with inflation for many Canadians.
- Housing Affordability: Home prices remain high across much of the country, and rental costs have surged in urban centres.
Financial Stress Now the Norm
With 85% of Canadians reporting they’re living paycheque to paycheque, the concept has shifted from being a sign of financial distress to a common experience for the majority.
This has long-term implications for household savings rates, retirement planning, and economic mobility. It also raises concern about how Canadians will handle unexpected costs such as job loss, medical bills, or major repairs.
How Canadians Are Coping
According to the survey, many are adjusting their habits:
- Cutting back on discretionary spending
- Delaying large purchases or vacations
- Taking on additional debt or using credit cards for basic expenses
- Seeking financial advice or tax planning services
H&R Block suggests that Canadians should take steps such as building emergency funds, reassessing their budgets, and exploring financial support or credit counseling if needed.
References:
- H&R Block Canada Survey – 2025: Read the press release
- Global News coverage: 85% of Canadians living paycheque to paycheque, H&R Block survey finds
- CBC News: Rising costs pushing more Canadians to financial brink
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