15 February 2019

According to the survey, 46% of respondents felt no impact from higher rates, while in October it was 50%. Meanwhile, the number of Canadians who benefitted from rate increases (holders of interest earning assets), rose from 7.5% to 8.4% just in three months.

Certain economists worry that the previous rate hikes were already too much. They focus on the consequences the national economy may face if Canadians with high debts start cutting their spending in order to pay off the debts. In the third quarter, Canada’s debt service ratio (the share of disposable income necessary for paying off principal and interest) was up to 14.5%, marking the highest number since before the 2008 financial crisis, says Statistics Canada.

However, as the Nanos survey shows the situation isn’t getting that bad. According to the poll, young Canadians are most vulnerable to rate increases: 51% respondents aged 18-34 years old say growing borrowing costs made them cut their spending. Meanwhile, the number is only 42% in case of 35-54 age category, and 34% for those who are 55+ years old. Another important issue is that 43% of women noted they felt the negative impact of higher rates, but in case of men it was only 39%.