Quebecers feel that interest rate cuts are not enough

The Bank of Canada announced a cut in the key interest rate Wednesday, from 4.75 per cent to 4.5 per cent.

Quebecers still feel extreme pressure about their debt and finances despite the slight relief.

According to a recent MNP service firm poll, three in five Quebecers need interest rates to go "way down" before resolving their finances. Seven in ten Quebecers say they "desperately" need interest rates to drop.

"Right now Quebecers are feeling, obviously, the pressure of interest rates and overall inflation," said MNP Senior Vice-President Olivier Boyd. "All of those combined give a sense that people in Quebec, and more largely in Canada, are feeling pressure from both sides whether it's from their debts or current obligations, or just going to the grocery [store]."

Boyd says that Quebecers feel more financially strained than residents of other provinces. He attributes that to Quebecers' lower incomes than other large provinces, such as Ontario, B.C., and Alberta.

According to Statista, Quebec's 2021 median family income of $96,910 is lower than the Canadian median and that of other large provinces:

Find more statistics at Statista

Boyd added that interest rate cuts Wednesday are positive but will not give Quebecers much-needed relief for quite some time.

"It takes a lot of time before that really translates to the daily lives of everybody," he said. "Right, people are seeing and feeling the interest rate hikes from several months ago."

Even with the cuts announced Wednesday, a key interest rate of 4.5 per cent is still a long way from pre-pandemic levels, when it was often set at one per cent or lower.

However, Bank of Canada governor Tiff Macklem said Wednesday further cuts could be coming.

"If inflation continues to ease broadly in line with our forecast, it is reasonable to expect further cuts in our policy interest rate," Macklem said.