Paying down debt and covering housing costs ranked as leading priorities looking into 2026
Canadians head into 2026 already in belt‑tightening mode. A new TD survey found that two in three Canadians plan to cut their spending this year, with younger households making the sharpest reductions, even as many said their commitment to buying Canadian has strengthened.
The findings land as borrowers confront a dense wall of renewals over the next two years and the lingering impact of higher interest rates. The Bank of Canada projected that roughly 60% of mortgages coming up for renewal would see payments rise from late‑2024 levels, with those renewing in 2025 and 2026 facing average increases in the mid‑single to low‑double digits.
Moreover, a new analysis from Rates.ca highlighted five everyday expense categories likely to climb this year, led by mortgage renewals, home and auto insurance, and higher costs for essentials such as food, transportation, and services.
According to TD, 67% of Canadians plan to cut back their spending this year, up from 51% a year earlier, and nearly six in 10 expected to trim monthly budgets by as much as $1,000.
Younger borrowers appear especially exposed, with 86% of Gen Z and 77% of millennials preparing to tighten budgets, compared with 65% of Gen X respondents and 43% of boomers.
Many of those cuts showed up in the very categories that typically give households room to maneuver when mortgage costs rise. Dining out (55%), retail purchases (53%) and entertainment topped the list of sacrifices (44%), alongside more comparison shopping (41%), trading down to store brands (39%) and cancelling subscriptions (31%). TD also reported that one in four Canadians has taken on a side hustle or part‑time work to help manage expenses.
Behind those moves sits a gap between what households said they want to achieve financially and the structure they have in place. Saving and investing, managing day‑to‑day expenses, paying down debt and covering housing costs all ranked as leading priorities, yet only just over a third of respondents reported having a formal financial plan for 2026.
“Intentions are a great first step but turning them into action is what truly makes the difference," Joe Moghaizel, vice president, Everyday Advice Journey at TD, said.
“One of the most empowering things Canadians can do is create a practical and achievable budget with clear savings goals. Something that not only guides you but also builds your confidence along the way. Simple habits, like pausing to understand your needs versus your wants, can strengthen your financial resilience and help you feel prepared to reach your goals in the year ahead," he said.
Buy Canadian sentiment stays strong
Even as budgets tighten, the survey suggests that support for domestic businesses has not faded. Nearly two‑thirds of respondents said their commitment to buying Canadian is stronger than a year earlier, with buying Canadian‑made products and shopping at local small businesses outranking brand nationality or head office location as priorities.
“While Canadians are being more intentional with their spending and savings, their desire to support Canadian-owned businesses is evolving from a trend to a habit," Julia Kelly, vice president, Small Business Banking at TD, said.
“This comes at a pivotal time for business owners who continue to face rising costs and a changing business environment," she said.
The Buy Canadian Policy is an initiative designed to channel billions in public spending toward Canadian-made materials and small business contractors. The policy will boost local supply chains, speed up homebuilding, and open more doors for mortgage professionals.
The honourable Rechie Valdez, minister of Women and Gender Equality and secretary of State (Small Business and Tourism), said the policy would “strengthen supply chains, streamline access to federal opportunities and ensure that businesses of all sizes have a fair chance to compete and succeed.”
Valdez added, “When we buy Canadian, we are supporting good jobs, strengthening our economy and building prosperity here at home.”
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