Most Canadians changed holiday spending plans amid tariff and inflation worries, according to a BMO survey
Most Canadians entered the holiday season spending less and changing how they shop, with 61% adjusting their plans because of rising prices and economic pressures. Of those, 37% tried to buy gifts less affected by tariffs, such as choosing goods made in Canada.
According to BMO’s Real Financial Progress Index, which was conducted among 2,500 respondents from September 3 to October 11, 2025, 41% planned to cut back on spending. Meanwhile, a quarter started their holiday shopping earlier than usual to sidestep anticipated price increases.
“In the wake of recent tariff increases, rising unemployment, and an upturn in inflation, it’s not surprising that Canadian consumers are feeling a sense of trepidation heading into the holiday season,” Sal Guatieri, senior economist at BMO, said.
“Though not elevated, annual CPI inflation picked up to 2.4% in September after remaining below 2% in the previous five months, partly due to a 3.8% rise in food costs. By weakening the economy, the trade war has lifted the unemployment rate, undermining consumer confidence and income growth,” Guatieri explained.
Canadians rethink priorities as costs rise
The average Canadian planned to spend $2,310 this holiday season, including $545 on travel and $517 on food and groceries, according to the survey.
But with 46% reporting that holiday sales and discounts led them to spend more than intended, financial stress remained high—half of respondents said holiday spending caused them anxiety, and over a third admitted to sacrificing long-term savings to afford seasonal expenses.
Anthony Tintinalli, head of specialized sales at BMO, noted, “With concerns about the rising cost of living and economic uncertainty shaping holiday plans, Canadians are showing resilience by budgeting earlier, shopping mindfully, and prioritizing what matters most.”
Tintinalli added that starting early, setting a budget, and focusing on meaningful purchases could help consumers feel more empowered and in control.
Mortgage professionals watch for ripple effects
Consumer confidence and debt levels often influence mortgage activity, especially during periods of economic stress. When clients feel squeezed by inflation or job insecurity, they’re more cautious about taking on new debt or making big moves.”
BMO’s survey also flagged that 35% of Canadians took on extra work to cover holiday expenses, with younger generations most likely to do so.
Meanwhile, nearly one in ten were unsure when or if they would be able to pay off their holiday bills, raising concerns about household debt loads heading into 2026.
Canadian consumer insolvencies climbed to their highest level since the global financial crisis, with new data from the Office of the Superintendent of Bankruptcy (OSB) showing a 4.8% year-over-year rise in Q3 2025 filings.
The 36,256 filings recorded in the third quarter marked the third-highest quarterly volume since 1987, and the highest since 2009.
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