More working Canadians rely on credit for groceries as costs rise

More working Canadians are using credit to buy groceries and pay bills just to get through the month, a recent national survey by Spergel revealed. Over half of respondents relied on credit to purchase groceries. The financial strain comes as the Bank of Canada announced its first interest rate hike since 2023, making carrying a balance on a line of credit more expensive. Self-employed people may have the least room to absorb the shock.

An August 2026 Equifax Canada survey found 29 percent of Canadians said they were using more credit to pay for food, utilities and other essentials compared to a year ago. Nearly one in four respondents expect to pay only the minimum amount on their credit cards, and 32 percent have cut their grocery bill and other essentials. Dalhousie University's Agri-Food Analytics Lab found that one-third of Canadians are dipping into savings or borrowing money to buy groceries. The Equifax survey also found younger households and families with children are the hardest hit. Canadians under 55 were twice as likely as older Canadians to use more credit to cover essential expenses, at 36 percent versus 18 percent. For households with children, the figure was as high as 42 percent.

Self-employed workers face unique challenges. As of 2023, roughly 2.65 million Canadians were self-employed, or 13.2 percent of all workers, according to Statistics Canada. More than 25 percent had gig work as their main job. Self-employment income rarely arrives on a set schedule, and accessing credit becomes more common to bridge gaps when payments are late or contracts end.

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Self-employed workers also miss safety nets most salaried employees have. They cannot collect Employment Insurance if work dries up. While they can opt in to EI special benefits like sick leave or parental leave, they must pay the premiums themselves rather than having them deducted from a paycheque. Tax remittance poses another hurdle, as an unexpected tax bill could land after filing, potentially ending up on a credit card.

Financial experts recommend several strategies to manage finances. They advise setting tax money aside first by putting savings into a separate account and moving a percentage of each payment the day it comes in. Building emergency savings in a high-interest savings account, starting with an amount that covers one month of expenses, can help break the habit of using credit. Paying yourself a set minimum salary from business income can create a buffer for tight months. Running all business income through one account and paying a set amount to a personal account every two weeks leaves a buffer in the business account. Putting money on the most expensive debt first, such as credit cards which often charge between 19.99 and 29.99 percent interest, is also recommended.

Double-checking benefit entitlement by filing taxes on time ensures you do not miss out on the GST/HST credit or other benefits. Getting free help early from a non-profit credit counsellor can help structure a debt repayment plan before the situation becomes unmanageable. You can find one through Credit Counselling Canada. Self-employed Canadians are juggling the same rising costs as other workers but without a steady paycheque or employer benefits. While you may not control when clients pay, reserving a portion of each payment can create a buffer for lean months and help break the credit-debt cycle.

With files from Yahoo News