Concerns about the strength of the Canadian economy continue to weigh on the minds of many Canadians, with more than half (54%) anticipating the country will slip into a recession in the coming year – and nearly a third (32%) believing Canada is already in a recession.
The findings come from Dye & Durham’s newly launched Canadian Pulse Report for Q3 2023, a survey of 1,001 Canadians conducted amongst members of the online Angus Reid Forum looking at trends in the economy, technology and the real estate market. The Q3 Report looked at three key areas that impact all Canadian citizens and businesses, including legal professionals – familiarity and comfort with Artificial Intelligence tools, business and personal spending trends and perceptions and plans impacting the real estate market. The intent of the report is to generate new data that can provide insight into current trends and help professionals in the legal industry and others plan for the coming months.
High interest rates having a notable impact on Canadian financial wellbeing and spending patterns
The new report reveals that only 25% of Canadians believe they are in a better place financially than they were at this time last year. Significantly more (39%) say they are in a worse place financially than they were one year ago.
High interest rates have played a considerable role in this, as a majority of Canadians say they’ve had to spend more on items like groceries (76%), gas (65%) and auto (58%) and home (56%) insurance. At the same time many report they’ve had to put less money towards personal savings (53%), emergency savings (45%) and retirement/RRSP savings (35%) and reduce charitable donations (45%) due to high rates.
“It’s clear that many Canadians have been feeling pinched by this high interest rate environment and have seen their purchasing power throttled over the past year,” says Martha Vallance, Chief Operating Officer, Dye & Durham. “This has had a downstream effect on everything from housing and retail to legal services over the past 12 months. However, as rates begin to hold – and eventually decline – we expect to see a significant upswing in areas like real estate transactions, business originations and others that should help legal firms bounce back from a slower-than-normal year.”
Canadians getting comfortable with AI in their own hands – but not yet in the hands of service providers
Artificial Intelligence is proving to be more than just a buzzword as the vast majority (87%) of Canadians say that they’ve experimented with using Generative AI tools (like ChatGPT and others) for business or personal reasons (or both). However, frequent usage is significantly lower – with less than one-in-ten saying they use AI weekly for personal (8%), professional (7%) or both personal and professional reasons (7%). While Canadians are beginning to get familiar with AI themselves, nearly half (44%) say they do not expect AI to have any impact on their own jobs during their career.
There remains considerable concern about skilled providers incorporating AI into the services they provide their customers. Three-in-five (60%) Canadians say the idea of lawyers or notaries using AI to support or conduct the services they provide to them makes them uncomfortable – second only to doctors and medical professionals (63%).
A better understanding of usage and benefits would significantly increase comfort levels. More than a quarter (27%) say they would be more comfortable if their lawyer/notary could guarantee using AI would lead to a better outcome or better accuracy for their service, and nearly as many say they’d be more comfortable if it significantly reduced costs (26%) or was used to improve the performance of the legal professional without replacing them outright (25%). Having the ability to opt-in or opt-out of AI being used in delivering their service (23%) and having the use of AI clearly explained in advance (19%) would also significantly increase comfort levels, according to those polled.
“It’s clear that there is considerable interest in the potential of AI amongst the average Canadian, but as with many new and revolutionary technologies there remains concerns – founded or otherwise – that can slow adoption and consumer benefit,” says David Nash, Chief Product Officer, Dye & Durham. “Canadian legal professionals see the enormous potential for AI to provide cost, efficiency and accuracy benefits in their day-to-day roles. It will be critical in these early days for legal professionals to educate their clients on how AI is both being deployed in their firms and how it will be able to improve the service their clients are receiving.”
Many Canadians still sitting on the sidelines of the real estate market, but brighter days appear ahead
The Canadian real estate market has been significantly impacted by higher interest rates over the past year, while prices have remained elevated due to limited inventory. While a significant part of the market continues to wait until purchase prices (24%) and/or interest rates (23%) drop, 10% of Canadians polled say they expect to sell their primary residence and purchase a new primary residence in the next year – double the number that said they did so in the past twelve months (5%). Nearly twice as many respondents said they plan to buy their first owned home in the next year (8% vs 4% in the past 12 months) or buy an investment/income property or secondary/vacation property (8% vs 5%) compared to those that did so in the past year.
