Postsecondary students are being hit hard financially as they prepare to go back to school, as experts say inflation is being driven by expenses that younger people are especially vulnerable to: rent, groceries and eating out.
Carrie Cooper, a 26-year-old student who recently finished an undergraduate program at York University in Toronto, said rising living expenses are part of the reason she decided to do her graduate program at Fanshawe College in London, Ont., where she’s from, rather than a larger city.
She works at two jobs alongside her education, but is beginning to look for a third job to cover expenses while paying for tuition. She also shops for whatever groceries she can at dollar stores, and exchanges child-care services with friends for meals.
“Students are having to deal with all of this while going to school, which is basically a full-time job. How is anyone supposed to succeed in an environment like this?” Ms. Cooper asked.
Postsecondary students are heading back to class this month as they deal with some of the highest rates of inflation in decades, while also looking for housing as rental costs in many Canadian cities increase dramatically after the peak of the pandemic.
The Consumer Price Index rose by 7.6 per cent in July compared with the previous year, which was a slight decrease from June’s increase of 8.1 per cent. June’s increase was the highest rise in inflation in nearly 40 years.
Benjamin Tal, deputy chief economist at CIBC World Markets, said even though inflation dipped in July, the key components that affect students, including groceries, dining out and rent, continued to rise when compared with inflation figures from June.
The slight drop in overall inflation in July was also largely driven by declining gas prices – a segment that doesn’t have a large effect on most students, especially those in larger cities.
“We have to look at inflation by age groups, and I suggest that young Canadians, especially students, are feeling inflation more significantly than others because they’re more exposed to segments of inflation that are rising the fastest,” Mr. Tal said.
Paul Danison, content director for Rentals.ca, pointed out that the year-over-year increases in rental rates were staggering in some student towns. August’s rental costs were the highest ever seen in some cities, such as Victoria where the average cost of a two-bedroom unit rose by 34 per cent to $2,836. In other larger cities such as Toronto, an increase of 25 per cent for the average two-bedroom simply marked a return to prepandemic levels.
In either situation, Mr. Danison said the steep rise in prices would present a shock to any student’s finances if they were getting a new rental this year.
“They really are wild numbers,” said Mr. Danison, who added there doesn’t seem to be an end in sight for rising rents. “Students are going to have to get creative and live further away from campus or team up with more roommates.”
In London, Ont., Ms. Cooper said there is a constant fear in the student community of losing their rental units as properties get sold in the southwestern Ontario city’s hot housing market.
She said evicted students end up being vulnerable to the city’s competitive rental market. Rentals.ca found the cost of a two-bedroom in London rose by 23 per cent compared with the previous year to an average of $2,060 in August.
In Vancouver, Eshana Bhangu, president of the Alma Mater Society of the University of British Columbia, said she’s noticed a marked difference at the organization’s food bank this year as a result of rising expenses, with students lining up hours before the facility opens, and lines stretching around the corner.
“At UBC alone, 57 per cent of students report experiencing financial hardship that’s specifically related to just the cost of housing, and 62 per cent of students report high housing costs as the reason why they’re worried they won’t have enough to purchase groceries,” Ms. Bhangu said.
“There are very real choices that students are having to make about groceries, educational materials and the roof over their head.”
Even in Montreal, a city with a reputation for cheap rent and a low cost-of-living, students say they’re being affected by higher expenses.
The average cost of a two-bedroom unit in the city rose by 5.7 per cent compared with the previous year to $1,958.
Nick Vieira, a PhD student studying physics at McGill University, said the research stipend and wages that students receive as teaching assistants used to be enough to cover expenses, and even allowed for saving a couple hundred dollars at the end of a month.
But in recent months, Mr. Vieira said PhD students were struggling to break even with their income and were taking side jobs on top of their demanding school responsibilities.
This year, students from McGill’s physics department were able to negotiate an increase in their stipend from roughly $20,000 for the fall semester to $24,000. It’s a one-time top-up, but Mr. Vieira said he hopes students now have the momentum to make it a permanent raise.
“Our negotiations were successful, even though a lot of people didn’t think it would be at all possible,” Mr. Vieira said. “There is some power in organizing and faculties can be a little more understanding than maybe people first anticipate.”
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