Voter support for the federally governing Liberals has dwindled, according to new data from the Angus Reid Institute.

The decline in support follows the Bank of Canada’s decision to drive up interest rates this week, the first such hike in six months.

Specifically, the central bank raised its touchstone interest rate 25 basis points to 4.75% Wednesday, returning the cost of borrowing to a level not seen in more than two decades.

Speaking to the Greater Victoria Chamber of Commerce Thursday, the bank’s Deputy Governor Paul Beaudry said a rising risk of sticky inflation influenced the decision to pump up interest rates.

“We’ve had an accumulation of evidence – on many fronts, over time and across a whole set – that tells us that inflation seems to be more sticky and it’s going to be harder to get it down to that 2%,” said Beaudry.

“It’s that accumulation of evidence that brought us to our decision.”

The central bank’s next meeting will take place July 7, and Bloomberg’s World Interest Rate Probabilities shows a more than 64% probability that the bank’s touchstone interest rate will increase another 25 points.

Interest rates have grown significantly since the beginning of 2022, affecting homeowners with mortgages as the cost of borrowing goes up.

Renters have been hurt too, as many landlords are impacted by the increased interest rate.

Since June 2022, both renters and owners are more likely to report difficulties paying their rent or mortgage, said Angus Reid, further noting that one year ago, one-in-five renters, or 19%, reported doing so was “very difficult.” That number has jumped to 24%. Further, the proportion of owners experiencing difficulty paying their mortgage has increased more than 10% during the same time frame.

Referring to housing as “just one gust among many financial headwinds faced by Canadians,” Angus Reid highlights an increase in the cost of groceries too. Moreover, the institute says grocery costs have gone up faster than the core inflation rate itself.

As the cost of the aforementioned necessities grows, many Canadians have used credit to keep up, the report notes.

“Overall consumer debt has hit a record high in Canada, and any further rate increases from the Bank of Canada would put pressure on Canadians holding credit card balances and other loans," it reads.

Overall, nearly half of Canadians polled said they are in worse shape financially than they were last June.

Calling the central bank’s rate hike a “disaster for many Canadians,” federal Conservative leader Pierre Poilievre blames government spending and budget deficits for the inflation that prompted the increase.

Highlighting the “strength” of the Canadian economy, Finance Minister Chrystia Freeland countered that inflation is global in nature.

According to Angus Reid, however, the Tory leader’s economic messaging appears to be resonating more so than the Finance Minister’s.

Currently 37% of leaning and decided voters say they’d vote for the Conservative candidate in their riding if an election were held. This is compared to 29% support for the Liberals and 20% support for the NDP.

The institute’s data shows more than 50% voter support for the Conservatives among those hurting the most financially, whereas approximately one-third as many, or 18%, would vote Liberal. The New Democrats have 16% support.

“These economic concerns appear to be driving dissatisfaction with the incumbent Liberals among its own party supporters,” said Angus Reid,” calling the overall trend for the Liberals “disconcerting” to party strategists.

After the Liberals established a minority government in 2021, 80% of the party’s voters said they’d support the party again if an election were held. This dropped 8% by the end of 2022 and has since dropped to 67% overall this month.

“Perhaps softening this blow, however, is the fact that the largest portion of these former Liberal supporters say they would vote for the NDP (15%), who have been supporting the minority Liberal government with a confidence-and-supply agreement since the last election,” said Angus Reid.

The opposing Tories retain much of their 2021 support, as per the report, which shows 84% of voters voicing an intention to support the Conservatives again.

“The party’s overall vote intention proportion is largely unchanged over the past 16 months, hovering between 35% and 37% nationally,” said the institute.

(Image courtesy CBC)