Pain at the pump and cancelled vacations: How the cost of living is changing how we live

The Bank of Canada decided Wednesday to keep its benchmark interest rate steady at five per cent, which means no increase — for now — but also no immediate relief to people feeling the tug of financial distress. 

Sean Stack, whose work as a solvency trustee in St. John's involves helping people drowning in debt, says the bank's decision not to raise the rate comes with a sigh of relief.

"I think I shared that sigh with a lot of people because everything has been getting so expensive, from food and groceries to housing and everything," he said. 

"Any little break that we can get is a relief because obviously nobody wants things to get more expensive and just maintaining the status quo is a relief."

While the bank kept the rate steady Wednesday, the rate has steadily risen over the past year, and everyone who spoke to CBC News at a St. John's grocery store reported their lives have been affected one way or another by the rising cost of living — from food costs to fuel prices.

"You can't really plan to go and buy anything unless you're going to add an extra $100 or $200 on it," said Carole Barron. "You go to buy furnace oil, forget it. You can't afford to fill up your tank anymore because of the interest rates, and it's the same for buying a house — forget that."

Justin Merdsoy said high interest rates have made him hesitant to buy a home.

"I do have savings, and I was thinking about buying a home, but I'm certainly going to wait now. I'm still renting, and I'm pretty happy where I am, but I know that there are a lot of people who are feeling the financial pressure more than I am."

Even those who are not directly affected by interest rates still feel the pinch indirectly through the cost of living. Retiree Mike Menchinton has felt the impact first-hand.

"It's ridiculous, the price we're paying here for gasoline," he said. "You can't go spending money like you used to years ago because you got to try and hold on to every dollar you can."

Stack says people assumed his solvency work was busiest after the COVID-19 pandemic hit but it wasn't the case.

"The opposite is true because collection activity had stopped and people were under a lot of subsidies. But that's starting to change." Bankruptcies have increased over the past year, he said, and while numbers are lower than before the pandemic set in, his prediction for the future is grim.

At the end of July, he said, about 2,200 people in the province had filed for bankruptcy in the past 12 months, an increase of about 30 per cent over the previous 12 months.

"I would be surprised if it doesn't continue to increase, to be honest, just talking to anybody out there and how hard people are finding it in terms of their household budgets and keeping up with the cost of everything."