This study discusses Canadians’ opinion of their own provincial economies and the new financial direction for the country in 2015 – the recession, cost of living, national economy.

1. economic update | february 2015 | issue 24
CONSUMEROLOGY

2. economic update | february 2015 | issue 24
T H E C O N S U M E R O L O G Y R E P O R T
2
INTRO
CANADIANS VIEW THE ECONOMIC ROAD
AHEAD WITH PESSIMISM, ACCORDING
TO THE 2015 BENSIMON BYRNE
CONSUMEROLOGY REPORT. A MAJORITY
FEEL THE CANADIAN ECONOMY – AND
THEIR OWN PROVINCIAL ECONOMIES –
ARE IN RECESSION, AND ARE LOOKING
FOR A NEW FINANCIAL DIRECTION FOR
THE COUNTRY IN 2015.
Cost of living is Canadians’ top concern with nearly nine-in-ten believing that
cost of living is rising faster than their household income.
Given the perception that sluggish growth has become mild recession and
concerns about cost of living, marketers may find 2015 to be similar to last year,
as Canadian consumers remain largely unwilling/unable to spend more than
absolutely necessary in many product categories.
Stagnant incomes and concerns about the rising cost of living are reflected in
the 3rd Annual Bensimon Byrne Consumer Spending Index, which reveals that
across many product categories, consumers plan on cutting back as much in
2015 as they did in 2014.
ACROSS CANADA, MORE
PESSIMISM THAN OPTIMISM
ABOUT THE FUTURE
For the first time since November 2009, more Canadians believe the country’s
economy is in decline (55%) than believe it is growing (45%).

3. ( C O N T I N U E D )
3economic update | february 2015 | issue 24
T H E C O N S U M E R O L O G Y R E P O R T
Across the country, there are high levels of concern about the Canadian
economy, with those nearing retirement age feeling the most strongly
concerned. A majority of Canadians believe the national economy, as well as the
economy for their own province or territory, is in recession. Quebeckers are the
most negative about the Canadian economy and their own provincial economy,
while residents of the Prairies and Alberta view the Canadian economy most
positively. Ontarians and British Columbians are the most positive about their
own provinces.
A majority – in every region of the country except Alberta and the Prairies
– believe the country is headed in the wrong economic direction. While high-
income earners are the most optimistic about the direction of the country,
Canadians with household incomes below $75,000 see the country headed down
the wrong economic path.
The economy will certainly play a role in the upcoming federal election, as two-
thirds (67%) of Canadians think the country needs a new, different economic
plan. Even a majority of the highest-income Canadians are calling for a new
plan, as are residents of Quebec – a province which pundits and political parties
alike have indicated is a key battleground in the upcoming election.
Growth
Nov-08Apr-08 Jun-09 Jan-10 Aug-10 Mar-11 Oct-11 May-12 Dec-12 Jul-13 Feb-14 Sep-14 Feb-15
Decline
75
63
31
8
18
43
47
63
60
58
55 59
73
59
57
53
62
57
62
56
59
45
Assessments of the National Economy
“In general, how would you describe the state of the economy of Canada today –
would you say that it is in a period of ____________?”
0
20
40
60
80
100
25
41
27
35
37
77
32
51
46
37
70
38
47
43 44
38
89
44
35
33
41
55

4. ( C O N T I N U E D )
4economic update | february 2015 | issue 24
T H E C O N S U M E R O L O G Y R E P O R T
ECONOMIC PESSIMISM
IN CANADA TODAY
Canadians continue to be split as to whether their personal economic situations
are improving or getting worse from year-to-year. This strongly correlates to
whether or not an individual has debt; those with more debt than savings find
themselves getting worse, while those with no debt – or more savings than debt –
are more likely to say their own personal situation is getting better.
Cost of living is Canadians’ top concern again in 2015, with 85% of Canadians
believing that cost of living is outstripping their income, and two-thirds saying
their income is either holding steady or decreasing compared to where it was
five years ago.
A majority of Canadians are very concerned with the cost of housing – especially
in British Columbia. Not surprisingly, those with the lowest incomes and those
who do not own their own home express the most concern about housing costs.
0 10 20 30 40 50 60 70 80
72
Canadians’ Concerns - Among All Respondents
“How concerned are you about each of the following, on a scale of 1 to 9, where 1 is not
concerned at all and 9 is very concerned…?”
% very concerned
The cost of living
A secure, adequate retirement income
Divide between highest incomes versus middle/lower incomes
Your ability to get timely, quality health care if you need it
The amount of taxes you pay
Housing costs
Lack of good jobs
Corruption in government and business
The strength of the Canadian economy
The strength of the economy where you live
Social supports like EI and Social Assistance
The state of the environment
Government deficits and debt
Climate change/global warming
Access to PSE
The health of the manufacturing sector
The strength of the US economy
60
62
59
58
58
55
54
54
52
52
52
50
49
44
43
29
80

5. ( C O N T I N U E D )
5economic update | february 2015 | issue 24
T H E C O N S U M E R O L O G Y R E P O R T
Concerns about retirement are high across the board, but particularly
pronounced among Canadians who are in debt. Looking at Canadians who are
about to retire paints a dire situation for the years to come – while fewer than
one-third have saved at least $100,000 for retirement, one-third say they have
no retirement savings at all.
HOW ECONOMIC CONCERNS
IMPACT CONSUMER HABITS
Canadians’ negative views about the country’s economic future, combined with
their concerns about rising cost of living has a number of implications in how
they behave. Canadians in debt are scrambling to pay down debt as quickly as
possible, and a majority of Canadians – even those who don’t have to be careful
about spending – say that they are. Canadians are making a conscious effort to
minimize spending and maximize savings.
Views on the Economy and Personal Finance - Among All Respondents
% who strongly agree % who strongly disagree
0 10 20 30 40 50 60 70 80
(Those in debt) I'm trying to pay down
as much debt as possible
I am careful about spending, even if I don’t have to be
I am trying to spend as little as possible
I am trying to save as much as possible
I'm more worried about falling
behind than excited about getting ahead
“Please tell us how much you agree or disagree with each of the following.”
664
855
853
1049
1640

6. ( C O N T I N U E D )
6economic update | february 2015 | issue 24
T H E C O N S U M E R O L O G Y R E P O R T
More than one-third of Canadians are feeling less financially secure this
year than they did a few years ago. Very few agree that the next generation
of Canadians will have a better quality of life than the current generation.
Those who feel optimistic about the next generation’s economic outcomes
are outnumbered by more than two-to-one by those feeling pessimistic.
EXAMINING THE CONSUMER
SPENDING INDEX
The Bensimon Byrne Consumer Spending Index asks Canadians whether they plan
to spend more or less than they did last year, on 31 essential and discretionary items.
For example: assume Mr. and Mrs. Smith host a dinner party with their
neighbours once a month and the cost of groceries and alcohol has increased.
If their income is flat, they will likely consider fewer dinner parties, since
purchasing food and drinks for each event would cost more than it did last
year and would therefore exceed their annual budget for such events. Thus,
the Smiths would plan on spending less – especially on alcohol – next year,
not because the cost of alcohol or groceries has decreased, but because their
consumption must go down so they may live within their means.
Views on the Economy and Personal Finance - Among All Respondents
% who strongly agree % who strongly disagree
0 10 20 30 40 50 60 70 80
I am feeling more financially secure
than I did a few years ago
The economy where I live is good
The next generation of Canadians will have
a better quality of life than the current generation
“Please tell us how much you agree or disagree with each of the following.”
22 37
19 26
15 34

7. ( C O N T I N U E D )
7economic update | february 2015 | issue 24
T H E C O N S U M E R O L O G Y R E P O R T
Some economists and commentators have flagged the disconnect between
the Consumer Price Index (what is formally referred to as inflation), and the
inflation consumers experience on their essentials; housing, electricity, fuel,
and food prices all seem to outpace CPI. Our findings suggest the basket of
goods included in the CPI does not reflect more costly consumer essentials.
This is why Canadians continue to vocally complain about the cost of living
inflation while macroeconomic measures insist that inflation is in fact low,
as interest rates continue to fall. When real wages are flat and the cost of
essentials increases, demand is suppressed.
A Consumer Spending Index score greater than 100 indicates that consumers expect to spend
more in the coming year than they did in the last. A score of less than 100 indicates a reduction
in planned spending and scores closer to 100 indicate constant spending, relative to last year.
This score is comprised of two sub-indices; one for discretionary and one for essential spending.
For each, a score of 50 is the baseline.
The Essential Spending index includes Canadians’ planned spending on taxes, internet, groceries,
gas and auto maintenance, electricity and clothing for their children. Discretionary spending is
everything else.
The Consumer Spending Index score for 2015 is 90.6, meaning for the third year
in a row – since we began tracking spending across the index – Canadians plan to
reduce their spending.
Essential spending will be reduced slightly based on this year’s score of 49 –
but not as much as in previous years – as Canadians plan to spend more on
necessities like internet, groceries, auto maintenance, taxes and electricity.
Canadians plan on decreasing their discretionary spending significantly based
on this year’s score of 41.6.
This pressure impacts the range of Canadians households; even the wealthiest
Canadians are more likely to say they will reduce their spending in the next year
than increase it.

8. ( C O N T I N U E D )
8economic update | february 2015 | issue 24
T H E C O N S U M E R O L O G Y R E P O R T
WHERE DOES THIS LEAVE US?
The good news is that Canadians are thinking about the future. Many are saving
as much as possible and working harder than ever to pay down personal debt.
They are concerned for future generations and recognize that the solution
to their concerns about the national economy might be alleviated by a new
economic plan, rather than more of the same.
The bad news – for the second year in a row – is that Canadians continue to
feel tapped out. Despite low interest rates and record-low oil prices, they are
continuing to lower their spending and pay down debt. Therefore, they cannot
be counted on to consume above their means and fuel economic recovery until
take-home wages go up.
FINANCIAL MOBILITY IN 2015
The economic recovery has been uneven, with the number of upwardly-
mobile “haves” increasing in 2011 and holding steady since, while the ranks
of the downwardly-mobile “have-nots” peaked in 2013 and remains
roughly unchanged.
Measured in terms of financial mobility, 2015 continues to show the stagnant
recovery seen since 2011. If 2011 was considered to be a relatively good year
in terms of consumers feeling as though they were bouncing back from the
recession, the years since have been marked by feelings of stagnation.
Whatever ails our economy is not solely tied to the great recession, as the
data since 2011 indicates.

9. ( C O N T I N U E D )
9economic update | february 2015 | issue 24
T H E C O N S U M E R O L O G Y R E P O R T
Upwardly Mobile Canadians are those who have seen their personal finances improve and
have more savings than (non-mortgage) debt. Downwardly Mobile Canadians are those
who have seen their personal finances worsen and have more debt than savings. The Middle
Ground are those who have either seen improved personal finances but more debt than savings,
or those who have seen worsened personal finances but more than savings than debt.
METHODOLOGY
The findings discussed in this report are based on an online survey conducted by
The Gandalf Group, among 1,500 Canadians, proportionate to the gender, age
and regional distribution of the Canadian population. We also surveyed Quebec
in proportion to the province’s distribution of English and French speakers.
The survey was conducted from February 3 – 16, 2015, in both English and French.
2009 2010 2011 2012 2013 2014 2015
Downwardly Mobile with Debt Middle Ground Worse Off with Savings
Middle Ground Better Off with Debt Upwardly Mobile with Savings
Financial Mobility Over Time
21%
17%
22%
40%
26%
24%
17%
34%
34%
19%
21%
26%
34%
21%
16%
29%
32%
17%
19%
32%
33%
18%
16%
33%
35%
16%
20%
28%