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Many Canadians are taking an increasingly gloomy view of their finances and the overall economy heading into 2019.

That’s according to a new Ipsos study that found Canadians are more pessimistic about their finances today than they have been over the last three years.

Looking back at 2018, just 60% of those polled described their financial situation as “good.” Those in B.C. had the best assessment, at 67%, while Albertans clearly had a challenging year, with just 44% responding positively.

Looking to 2019, 71% of those polled said they feel “good” about their personal finances for the year ahead, down from 80% last year and 75% in 2016.

Quebecers and British Columbians are most optimistic heading into this new year (75% forecast that their financial situation will be “good”), and again Albertans are least optimistic, at 59%.

Canada’s middle class “is feeling particularly hard done by these days,” said Ipsos CEO Darrell Bricker. “They really don’t feel like they’re getting ahead.”

And more Canadians are losing faith in the economy as well, the poll shows. Just 60% feel good about the prospects for the economy in 2019, down from 65% in 2017, but up from 58% in 2016.

And they may be right, given increasingly mixed economic data in recent weeks, including a slowing real estate market in many parts of the country.

2019Headwinds for 2019

Signs of economic headwinds for both the global and Canadian economies are now coming from multiple directions.

The latest was straight from the Bank of Canada (BoC), which cautiously left interest rates on hold on Wednesday due to growing economic uncertainty, specifically falling oil prices, moderating global expansion and a slowing Canadian housing market.

There are also bright spots going into the new year, such as a 40-year low in unemployment, an economy running near potential and trade expected to improve, according to the BoC.

But this was also the first time the bank publicly acknowledged that Canada’s housing market slowdown has been more dramatic than expected.

“Weaker-than-expected housing activity in recent months and staff analysis suggest that the combined effect of tighter mortgage guidelines and higher interest rates has been larger than previously estimated,” it wrote in its January Monetary Policy Report.

Also yesterday, Victor Dodig, CEO of CIBC, commented that Canadian mortgage growth could turn negative this year.

“That depends if the housing market goes for a really negative turn driven by other macroeconomic factors. That could happen,” he said during a banking conference in Toronto. “I think in the foreseeable future I see more flatness to low single-digit growth in that overall category for Canada.”

The glimmer of good news for mortgage holders, at least, is that expectations for rate hikes this year have fallen dramatically. Just a couple of months ago markets were pricing in two or three rate hikes through the end of 2019, they now expect just one more hike this year, if that.

That’s good news for floating-rate mortgage holders. And those shopping or renewing into a fixed-rate mortgage should also start to see mortgage rates come down over the next week or two, given the recent steep drop in 5-year bond yields, which lead fixed mortgage rates.

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