High prices, tight budgets have Canadians trimming how they’ll celebrate this Christmas

Some Canadians are cutting back on spending this Christmas as they face yet another year of inflation.

For many, wallets are feeling especially light as they struggle to meet the expectations of buying gifts and cooking special meals for family and friends over the holidays.

“I think people really feel that financial pressure to maintain the level of tradition, or the level of comfort, or the level of entertainment that they have been used to up to this point,” said Janet Music, a research associate at Dalhousie University’s Agri-Food Analytics Lab.

“There’s a real emotional connection we have to our traditions and what we think of when we think of this time of year, what we have on the table and what that means, and that can be very pricey.”

A traditional Christmas meal for a group of four to six people will cost about $104.85 on average this year, according to her lab’s data. That includes turkey, potatoes, sauces, vegetables, stuffing, tourtiere, eggnog and dessert.

The cost will vary depending where you live in Canada — food prices are higher in Maritime provinces, for example, and even more in the northern territories.

While food prices are slowly dropping after three years of inflation, items typically associated with holiday dinners remain pricey. Turkey is up five per cent from last year, while potatoes are up nearly seven per cent and carrots almost 13 per cent, according to the lab’s data.

Some shoppers at St. Vital Mall in Winnipeg told CBC last weekend they were cutting back on expenditures for the holidays, including gift buying, because of rising costs.

“Cost of living has affected a lot of things, because usually we go all out on Christmas, but with the price of groceries and inflation, we are actually cutting back a lot [of] expenditures this year,” shopper Angie Stephenson told CBC Manitoba.

Black Friday Shoppers at Sherway Gardens in Toronto expressed similar frustrations last month.

Rohit Sahu told CBC that said he’s more aware now of how he spends every dollar. “Everything’s so expensive that you’re just cutting costs and trying to … be low-key and save money,” he said.

He said he’s a window shopper because nothing has met his high bar for what qualifies as a bargain right now. “The deals are good, but still not affordable for us.”

Food budgets stretched

The number of Canadians using food banks across the country reached record highs this year, with more than 1.9 million visits to food banks in March 2023, surpassing the previous record set last year by 32 per cent.

In a national survey released in October 2022, 30 per cent of Canadians said they were eating less healthy food due to rising costs. Almost 20 per cent said they skipped meals to save money.

The Agri-Food Analytics Lab predicts food prices will continue to rise next year, but at a lower rate of 2.5 to 4.5 per cent overall.

While Statistics Canada data shows the food component of the consumer price index has risen by 5.9 per cent in the past 12 months, the Agri-Food lab’s 2024 report found the average family actually spent $693 less on food.

That means they were likely eating less or downgrading to cheaper alternatives to cover other rising expenses.

According to a July poll conducted by Ipsos, 47 per cent of meat eaters said they planned to cut back on their meat consumption this year. Cost was the most common reason cited for the decision.

Inflation takes a bite out of holiday shopping budgets

Shoppers at Sherway Gardens in Toronto tell CBC News how their holiday spending plans have changed this year, as family budgets adjust to the current era of high inflation.

Some of the reason for cutbacks this holiday season is because of inflation-related financial pressures being felt in other areas, like housing, Music said.

“[The food budget] is something that people dip into when they need to cover some of these larger costs. Imagine you renegotiated your mortgage at a higher rate or your rent has been suddenly increased. It’s not something you can fix in the short term,” Music said.

“Shelter, right now, is the thing that’s really eating into all of this other discretionary spending.”

‘Emotionally hard’

Bank of Canada governor Tiff Macklem said last week that consumer confidence is at a recessionary low — even with the unemployment rate at pre-COVID levels — and there’s “no question” inflation is a big part of the problem.

“People feel like they’re working hard, but their paycheques, [they’re] not buying what they used to,” he said at a media availability following his final speech of the year.

Music says some Canadians, including people she knows, are forgoing the traditional Christmas gathering altogether.

“Me and my friends, in our extended relationships, we see that happening,” Music says.

“Maybe you don’t want to risk it because you just don’t know what next month is going to bring. So it’s something that just has to get let go, and that’s emotionally hard on people.”