Affordability concerns amid the heightened cost of living and a tough job market impacted by the trade war and tariffs may be changing how Canadians shop this holiday season, including how much they spend and whether they prioritize buying local.
That’s according to the latest survey data from the Bank of Montreal, which also found consumers may have already done a lot or all of their shopping because of price concerns.
“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 with BMO, said in a written statement.
BMO’s survey was conducted from Sept. 3 through Oct. 11 and asked 2,500 adult Canadians about their holiday spending plans this year.
Sixty-one per cent of respondents said they have adjusted their holiday shopping plans in some way due to tariff concerns, and 41 per cent said they were cutting back on how much they planned on spending for gifts and other holiday items.
Twenty-five per cent said they started their holiday shopping earlier to avoid potential price increases.
This comes after the Bank of Canada warned that consumers were feeling “cautious” ahead of the holiday shopping season, and after the Royal Bank of Canada reported consumers were spending less, citing credit card data.
A separate report from PwC Canada found 80 per cent of consumers said during the summer that they planned to spend less overall during the holiday season and an average 10 per cent less than last year.
Inflation in September showed consumer prices on average increased 2.4 per cent compared with a year ago, according to Statistics Canada.
An uncertain job market may also be weighing on consumers during the holidays, with unemployment hovering around seven per cent, and it’s even worse for younger Canadians at over 14 per cent, according to government data.
“By weakening the economy, the trade war has lifted the unemployment rate, undermining consumer confidence and income growth,” Guatieri said.
Some retailers like Costco have adjusted their in-store holiday displays by focusing less on seasonal decorations, toys and other non-essential items to offer more space for “necessities,” like food and clothing.
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Forty-six per cent of respondents to the BMO survey said sales and discounts were causing them to spend more or purchase more gifts than they originally intended.
Retail experts say consumer tools like loyalty programs can help to save money during the holidays, but only if they are used effectively.
Over a third of respondents in the BMO survey, 36 per cent, said they knowingly sacrifice their long-term savings to afford their holiday spending plans. That backed up a separate report from Willful in October found nearly half of survey respondents, 46 per cent, said they had to dip into their savings to keep up with daily expenses.
The BMO survey results show consumers are making cutbacks on some parts of their holiday shopping list more than others.
For example, 46 per cent of respondents said they plan on cutting spending the most on holiday decorations, 43 per cent said travel, 42 per cent on dining out, 40 per cent on toys and games, 38 per cent on alcohol, and 36 per cent on both clothing and entertaining guests, the report says.
Overall, Canadians said they planned on spending an average of $2,310 this year, compared with $1,991 in 2024’s survey.
In the 2025 survey, 15 per cent said they are budgeting to spend more on gifts in anticipation of higher prices, and the biggest change year to year was travel spending expectations.
In 2025, BMO survey respondents said they planned on spending $545, while in 2024, it was more than triple that amount at $1,801.
The 2025 survey also showed respondents expect to spend an average of $517 on food and groceries during the holidays, while last year’s survey did not include the same category.
Buying Canadian during the holidays
Consumers may have shifted their holiday spending plans because of higher prices and an uncertain economy and job market, but the survey results also show Canadians may be more mindful when it comes to what they specifically choose to buy.
In the BMO survey, 37 per cent of respondents said they were looking to avoid products impacted by tariffs, including purchasing more Canadian-made products.
Tariffs imposed on Canada and other countries by the United States have fuelled a sense of consumer patriotism ever since the trade war began, with the Buy Canadian movement potentially set to peak during the busiest shopping season of the year.
The added costs on some items as a result of tariff policies may not be the only reason Canadians are put off from buying them.
A separate Ipsos poll conducted exclusively for Global News in September found 58 per cent of respondents had gone out of their way to specifically avoid American products, services, investments and travel.
Another poll found six in 10 Canadians said they can never trust Americans the same way again — a popular feeling after U.S. President Donald Trump repeatedly suggested Canada should become the “51st state.”
This means it may not be the wallets of Canadian consumers that are hurting because of tariffs, it may also be sentiments overall, which could explain the push towards choosing Canadian-made products wherever possible over those made in the U.S.
Travel statistics also continue to show declines among Canadians travelling to the U.S.
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