Ahead of the December 6th interest rate announcement by the Bank of Canada, 68% of Canadians think it's time for interest rates to start coming down.

Pluriel’s November 2023 round of the What Canadians Think omnibus survey asked a representative sample of 1,374 Canadians a wide-ranging series of questions about the economy. The survey was fielded online on November 26, 2023. The equivalent margin-of-error for a similarly sized probability sample is +/- 2.6% (with .95 confidence).

Top takeaways

  • Canadians’ economic malaise is shifting away from a primary focus on inflation, and is now turning toward concerns about recession and economic growth. More than two-thirds of Canadians (68%) believe the economy is either definitely (26%) or probably (42%) in recession.
  • Ahead of the December 6, 2023, interest rate announcement from the Bank of Canada, 68% of Canadians think it’s time for the Bank to start lowering interest rates, a belief held most strongly by homeowners with mortgages (72%) and those Canadians who are pessimistic about the state of the economy (78%).
  • Despite the strength of these preferences, Canadians are comfortable with the Bank of Canada keeping its inflation target at 2 percent (81%) and a majority of 54% want the Bank of Canada’s decision-making to be kept independent from government interference. Canadians clearly want the government to find other policy levers to address economic growth separate from those available to the Bank.

Quote

“Canadians’ economic malaise is shifting away from a central focus on inflation and toward slow growth. More than two-thirds think the economy is in recession, and the same number think it’s time for the Bank of Canada to start lowering interest rates. Nonetheless, we don’t find much support for a higher inflation target, or for government meddling in the decision-making of the central bank. That means the federal government still has its work cut out for it in finding additional policy levers to boost Canadians’ confidence in the economy.”

Gabriel De Roche, CEO of Pluriel Research

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Canadians’ economic malaise

  • More than two-thirds of Canadians think the economy is in recession (68%: 26% “definitely”; 42% “probably”), despite recent announcements that Canada has avoided a technical recession.
  • When it comes to the job market, confidence is higher but still tentative. 13% of Canadians are “very confident” that someone in their line of work who lost their job could find one that paid the same or higher, while 43% are “somewhat confident.” 44% are not confident at all.

The economic growth / inflation trade-off

  • While much of the focus of Canadians’ economic malaise over the past year or more has been inflation, we are now seeing much more concern about economic growth.
  • When asked to make a direct trade-off, nearly three-quarters of Canadians (73%) wish the Bank of Canada would prioritize economic growth with lower interest rates, compared to only 27% who want more efforts to fight inflation.

Large majority thinks it’s time for lower interest rates

  • A large majority of 68% of Canadians think it’s time for the Bank of Canada to start lowering interest rates, even though analysts expect rates to hold steady.
  • A smaller group, 27%, want interest rates to stay at their current level, while a minuscule 5% would like to see an even more aggressive approach to fighting inflation with higher interest rates.
  • Perhaps unsurprisingly, the desire for lower rates is held most strongly by big-ticket borrowers: 72% of homeowners with mortgages think it’s time to start lowering interest rates, along with 70% of renters — compared to 61% of homeowners without mortgages.
  • The biggest proponents of all subgroups of Canadians for rate decreases are those who are pessimistic about the prospects for the economy over the next three months at 78% in favour of lowering rates.

The role of government, central bank independence, and the two percent inflation target

  • Despite past critiques by Conservative leader Pierre Poilievre of the Bank of Canada’s independence, a majority of Canadians (54%) believe the central bank’s decision-making should be kept independent of government interference.
  • This is particularly true of likely Conservative voters, nearly six-in-ten (59%) of whom favour central bank independence.
  • And while earlier comments from Liberal finance minister Chrystia Freeland suggested a preference for lower interest rates, 55% of Liberals favour independent decision-making by the Bank of Canada.
  • One macroeconomic policy lever the government does potentially control is defining the Bank’s inflation target — set consistently across jurisdictions at 2 percent. However, we find little support increasing the inflation target at only 19% support (though, admittedly, this is a complicated issue and public opinion presents at best a noisy signal of preferences in this domain). This number is consistent across all the parties’ supporters.
  • What this means is that, to confront Canadians’ economic malaise, the government will need to continue to work to identify additional levers outside of monetary policy to boost Canadians’ confidence in the economy.

Methodological note

This survey, part of the What Canadians Think omnibus survey (one of Pluriel’s high-frequency data products) was conducted online on November 26, 2023, with a sample size of 1,374 adult (18+) Canadians, including an oversample in the province of Ontario. Respondents were recruited from a blend of online panel providers to maximize representativeness. Sample imbalances were minimized through the use of quota sampling on age, gender, and region. Sampling weights were applied to account for the Ontario oversample, and post-stratification survey weights were applied to correct for any remaining observable sample imbalance. The margin-of-error for an equivalently sized probability sample is +/- 2.6% (19 times out of 20). Margins-of-error for subgroups are larger commensurate with their share of the population. Reported percentages may not always add to 100 due to rounding. This survey was paid for by Pluriel.