Only one in 10 Canadians are planning to investing their tax refund this year, a new CIBC poll has found. The majority of Canadians are choosing to either hold on to their funds as cash or spend it on essentials, with only 12 percent planning to invest. Luka Marjanovic, managing director and head of CIBC Investor’s Edge, believes more Canadians should consider investing their tax refund as a way to make their money work for them, especially with the eroding value of parked cash due to higher inflation.
Statistics Canada reported a 2.9 percent inflation rate in March, which has forced Canadians to deal with higher borrowing and shelter costs. The cost-of-living crisis in Canada seems to be worsening, as another Ipsos poll conducted for Global News found that four in five Canadians believe that owning a home is only for the rich. With more of the monthly budget going towards cost-of-living expenses, some Canadians are finding it challenging to save for retirement. The poll also revealed that more Canadians are dipping into their personal savings or using retirement funds to make ends meet.
The figures from CIBC on tax refund spending plans mirror last year’s findings, indicating that Canadians are still feeling the financial strain of high living costs and economic uncertainty. Despite the challenges, Marjanovic emphasizes the importance of considering investment opportunities for tax refunds, instead of keeping the funds as cash. With the ongoing impact of inflation and the elevated Bank of Canada policy rate, investing could be a more fruitful long-term strategy for Canadians managing their finances in a challenging economic environment.
The Ipsos poll conducted on behalf of CIBC Investor’s Edge revealed that 21 percent of respondents are putting retirement saving on hold due to the increasing cost of living, with some Canadians resorting to using personal savings or retirement funds to cover expenses. This comes amidst the release of the 2024 federal budget, which promises to address affordability issues for Canadians. As the cost of living rises and economic uncertainty persists, it is important for Canadians to evaluate their financial strategies and consider investment options to ensure their long-term financial stability.
The Ipsos poll was carried out between April 3 and 4, interviewing 1,001 Canadians aged 18 and over to gain insight into their financial attitudes and behaviors. The findings serve as a reflection of the current economic landscape in Canada, where many individuals are reevaluating their saving and investment decisions in response to rising living costs and economic challenges. As Canadians navigate the financial implications of inflation and high living expenses, the importance of prudent financial planning and investment decisions remains crucial for ensuring financial security and stability in the long run.
