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94.8% of Canadians have some level of concern about their salary keeping pace with inflation

We recently explored the impact of inflation in Canada on employment and salary growth through our Canadian market research panel. The majority of survey responses (60.8%) indicated they had experienced no change in employment due to Canada’s surging inflation. Of more than 1,200 respondents, 14.2% indicated their income or employment status had been affected by rising inflation, and 25% said they weren’t sure.


Among the 14.2% who indicated their income or employment status had been affected, job loss was a common criteria. A common comment among the “not sure” group was that, while they are still employed, they feel their salary has not kept pace with the rising cost of living due to inflation.

“I was barely getting by before, but with the price of everything rising so much, I’ve had to get a second job just to keep up.” – Sue L. from Ottawa, Ont.

The Hidden Impact of Inflation on Canada’s Labour Market

It’s very difficult to directly link the impact of inflation to Canada’s labour market. Statistics Canada employment data shows a fairly flat line in recent months, nothing near the huge dip caused by the pandemic. There’s no big decline in jobs to point to in recent history, however, there is growing anxiety among working Canadians that the money they earn has less purchasing power as Canadian prices rise due to inflation.


Canada's Employment RateThe impacts of inflation are subtle, but noticeable in the comments shared by our survey respondents. Some are facing shortened working hours due to less in-store shoppers, others have taken on 2nd or 3rd jobs, and some have been forced to come out of retirement. Here’s a sample of some voices we heard from:

  • “I cannot buy as much with the money I earn and it costs me more to drive to work. It’s crazy how much things are costing, especially groceries. Some products are double what they were last year.” Note: for more on this topic, visit our deep-dive on food price inflation.
  • “I find my income just doesn’t leave much for anything but bills. There are cuts at work so my contract is ending 4 months early.”
  • “I’m retired and I had to go back to work.” Note: We have additional analysis on inflation’s impact on Canadians’ long-term goals such as retirement.

Inflation Results in Less Spending Power From Our Paycheques

Putting aside the simplistic Yes/No dichotomy of impacts to employment from inflation, a more meaningful observation arises when we look at Canadians’ views on whether their income is sufficient to meet their needs. The LARi Insight inflation survey asked “Do you feel your current income is keeping pace with the rate of inflation?” Just 5.2% of over 1,200 respondents chose “My income is completely sufficient”. To put that in perspective, the other 94.8% have some level of concern over their ability to meet their financial needs. Among all responses, 33.8% indicated their income is “somewhat sufficient”; 24.1% indicated their income is “barely sufficient”; 19.5% indicated their income is “mostly sufficient”; and 17.3% said “not sufficient at all.”

We asked survey respondents to indicate their household income level as part of the survey. A natural expectation is that the less household income, the more worried one would be about rising inflation. This finding held up, with over 2/3rds of lower-income households indicating their income is “barely sufficient” or “not sufficient at all”. However, an interesting finding is that most income brackets, including over $150,000 per year, had at least 20% of people who find their income “barely sufficient” or “not sufficient at all.”


It’s not entirely surprising. Many Canadians tend to spend in proportion to their income levels, and household debt has become an increasing concern as the cost of living has gone up. In the most recent quarter, Canadians owed $1.82 in credit market debt for every dollar of household disposable income in the third quarter, and housing debt continues to inch up due to rising mortgage interest rates.

Compare your Salary Growth with Canada’s Inflation Rates

We developed the LARi Insight Salary vs Inflation Calculator to allow Canadians to model the impact of rising inflation on their purchasing power. It allows you to plot your salary growth while assessing the change in value of our dollars based on CPI data.


Our inflation calculator (Canada) shows the impact of rising inflation on a fixed dollar amount. Additional posts explore the topics of food price inflation, and the impact of inflation on Canadians’ emergency fund savings. You can also develop a clear view of your financial picture using our Net Worth Calculator (Canada).

The Financial Impacts of Canadian Inflation

Explore our complete coverage, with original market research and analysis from LARi Insight.

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