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Consumer Finances and Priorities - Canada - August 2016

OVERVIEW
Regional classifications
Income
EXECUTIVE SUMMARY 
The issues
Consumer confidence is middling at best
Figure 1: Consumer confidence and opinions about the economy (% agreement), June 2016
Real estate and housing market values are not national concerns
Figure 2: Opinions about real estate and housing, June 2016
A quarter of Canadians are living from pay cheque to pay cheque
Figure 3: Agreement with statements on savings and spending, June 2016
Saving for retirement is the top long term priority; vacation, credit card debt and emergency funds are the top three short-term priorities
Figure 4: Financial priorities, June 2016
Women are more motivated to look for ways to save money
Figure 5: Agreement with statements on saving money, June 2016
The opportunities
How can the financial services industry respond to the squeeze faced by consumers?
Helping Canadians plan for retirement
Opportunity for financial advisors and the financial industry to make the topic of investments more appealing to women
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Canada’s population is expected to age in the coming years
The population is growing and becoming more ethnically diverse
Canadian real estate prices to see largest annual increase this century, according to a Royal LePage forecast
Canada’s inflation rate moved up to 1.7% in April
Canada’s economy disappoints; risk of contraction in the second quarter
MARKET FACTORS 
Canada’s population is expected to age in the coming years
Figure 6: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
Figure 7: Projected trends in the age structure of the Canada population, 2014-19
The population is growing and becoming ethnically diverse
Women outnumber men in Canada
Women’s representation and participation in the labour force
Part-time work
Wage gap declines but women still earn less than men
New financial literacy initiatives rolling out across Canada
Canadian real estate prices to see largest annual increase this century, according to a Royal LePage forecast
Canada’s economy disappoints; risk of contraction in the second quarter
Canada’s inflation rate moves up to 1.7% in April
KEY PLAYERS – WHAT YOU NEED TO KNOW
BMO launches service allowing people to open accounts through smartphones
Meridian introduces Sweep: A feature that ‘sweeps’ money daily
PayPal launches peer-to-peer payments in Canada
Canadian Tire introduces mPay
Scotiabank gives Apple Pay users 10% cashback
INNOVATIONS
BMO launches service allowing people to open accounts through smartphones
With $1 million in funding, Toronto-based Drop hopes to dominate North America’s loyalty market
MasterCard Canada planning to roll out ‘selfie pay’ in Canada
PayPal launches peer-to-peer payments in Canada
Digital banking upheaval the focus of Ivey’s new lab
Meridian introduces Sweep: A feature that ‘sweeps’ money daily
Tangerine and Ryerson University partner to open FinTech incubator
HSBC’s new PFM (Personal Financial Management) tool, Nudge and other PFM tools
Scotiabank branches out with two new branch formats, Express and Solutions
MARKETING CAMPAIGNS
Apple Pay arrives in Canada
Figure 8: TD bank Apple Pay online advertisement, July 2016
Scotiabank targets new immigrants
Figure 9: Scotiabank’s StartRight program advertisement, July 2016
Scotiabank gives Apple Pay users 10% cashback
RBC’s High Interest Savings Promotion
Figure 10: RBC High interest savings promotion email advertisement, July 2016
Canadian Tire introduces mPay
Figure 11: Canadian tire new mobile app print advertisement, November 2015
CIBC launches its new smart account
Figure 12: CIBC direct mail advertisement for CIBC smart account, April 2016
THE CONSUMER – WHAT YOU NEED TO KNOW 
Consumer confidence is middling at best
Real estate and housing market values are not national concerns
A quarter of Canadians are living from pay cheque to pay cheque
Saving for retirement is the top long-term priority; vacation, credit card debt and emergency funds are the top three short-term priorities
Women are more motivated to look for ways to save money
One in five Canadians have shopped with their mobile phone
CONSUMER CONFIDENCE AND OPINIONS ABOUT THE ECONOMY
Consumer confidence is middling at best
Figure 13: Consumer confidence and opinions about the economy (% agreement), June 2016
Women are more pessimistic than men
Figure 14: Significant differences in consumer confidence (% agreement), by gender, June 2016
Albertans are more optimistic about the local economy, while Quebecers are less so
Figure 15: Agreement with statement on economic conditions, Quebec vs Alberta, June 2016
…while Chinese Canadians appear more optimistic
Figure 16: Select consumer confidence statements (% agreement), Chinese Canadians vs overall population, June 2016
Inflation is a concern for many older Canadians
Figure 17: Opinions about inflation (% agreement), June 2016
REAL ESTATE PRICES AND HOUSING AFFORDABILITY
Real estate and housing market values are not national concerns
Figure 18: Opinions about real estate and housing, June 2016
Young Canadians are most concerned about housing affordability
Figure 19: Agreement with statement on housing affordability, by age, June 2016
PERSONAL FINANCES
A quarter of Canadians are living from pay cheque to pay cheque
Figure 20: Agreement with statements on savings and spending, June 2016
On the positive front, a third of young Canadians have at least $1,000 saved for emergencies
Young women are most stressed about their finances
Figure 21: Agreement with statements on personal finances, June 2016
But among older women, this worry may be due to a lack of confidence
Younger Canadians more likely to believe their generation is financially worse off
Older Canadians are more likely to manage their finances carefully
Figure 22: Agreement with statements on managing finances, June 2016
RETIREMENT AND INFLATION
Middle aged Canadians are worried about retirement
Figure 23: Agreement with statements on financial worry factors, June 2016
Women are reacting to inflation through stricter expense control
Figure 24: Personal finances, by gender, June 2016
FINANCIAL PRIORITIES
Saving for retirement is the top long term priority
Figure 25: Long term priorities (beyond a year), June 2016
Buying a home is the top priority for young women
Figure 26: Top long-term priority (Rank #1), by age and gender, June 2016
Vacation, credit card debt and emergency funds are the top three short-term priorities
Figure 27: Short term priorities (within a year), June 2016
Paying credit card debt is the top short-term priority for men
Figure 28: Top short-term priority (Rank #1), by age and gender, June 2016
Women place a higher priority on saving for a vacation and emergency fund
Figure 29: Significant differences by gender, short and long-term priorities, June 2016
Buying investments is a much higher priority for Chinese Canadians
Figure 30: Significant differences in short and long-term priorities, Chinese Canadians vs overall population, June 2016
SPENDING BEHAVIOUR 
Women are more motivated to look for ways to save money
Figure 31: Agreement with statements on saving money, June 2016
Older Canadians and women more likely to use loyalty cards
Figure 32: Agreement with statements on loyalty rewards cards, June 2016
SHOPPING HABITS
One in five Canadians have shopped with their mobile phone
Figure 33: Agreement with statements on shopping behaviour, June 2016
Older consumers more likely to stick to familiar brands but less likely to travel far for discounts
For one in five women, shopping is a stress reliever
Buying on credit: Difference between reality and self-perception
Figure 34: Agreement with statements on credit, June 2016
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Consumer qualitative research
Abbreviations and terms

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