The report provides an in-depth analysis of the Canadian economic climate and its impact on consumer behaviour in 2025. It highlights the cooling inflation rates, yet emphasizes the persistent financial pressure on households due to high living costs and rising unemployment. The report outlines consumers’ cautious financial strategies, with many opting to save or prioritize essential spending amidst economic uncertainties. Additionally, it explores the demographic shifts, noting the increasing racial diversity in Canada, which influences consumer preferences and market dynamics.
This report looks at the following areas:
- Change in financial situation
- Financial outlooks for the next year
- Concerns for the next six months
- Recent financial changes made and planned financial goals
- Use of extra money
As tariffs loom and costs of living still challenge Canadians, non-essential spending is off the table for many. That said, younger and multicultural Canadians are feeling aspirational about their financial future.
Candace Baldassarre, Senior Analyst
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EXECUTIVE SUMMARY
- What you need to know
- Consumer trends: key takeaways
- Canadians’ financial situations are mostly in the green
- Graph 1: financial situation compared to a year ago, 2024
- Major concerns vary across generations
- Graph 2: top three concerns for the next six months (select), by generation, 2024
- Consumers are feeling aspirational
- Graph 3: recent and future planned financial changes, 2024
- Opportunities
- Appeal directly to newcomers and multicultural Canadians
- Think outside the nuclear family home
- Encourage Canadians to get out of the house and have some fun
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STATE OF THE ECONOMY
- Economic snapshot
- Inflation rates continue to cool…
- Graph 4: Consumer Price Index, 2020-24
- …but consumers still are feeling the pinch
- Graph 5: consumer price index, 2020-25
- Canadians’ higher savings rates persist amid inflationary pressure
- Graph 6: household savings rate, 2019-24
- The Canadian economy’s growth appears steady, yet modest
- Graph 7: quarterly real GDP growth, 2021-24
- Tariffs, Trump and tumultuous times
- Canadians aren’t entirely optimistic about a Trump presidency
- Graph 8: expected impact of Trump presidency on select issues, 2024
- 2025 looks like uncertain times
- Mortgage rates remain above historical norms, prolonging affordability barriers as homeownership costs rise faster than incomes
- Graph 9: Housing Affordability Index, 2019-24
- Graph 10: average conventional mortgage rates, 2019-25
- Renewal pressures and evolving borrower preferences challenge lenders to offer competitive solutions to maintain affordability and retention
- Canadian identities have become more racially diverse
- Graph 11: proportion of racialized population, 2001 vs 2021
- Graph 12: population by race, 2001 vs 2021
- Prohibitively high food prices mean Canadians have to consider cuts in other areas
- Graph 13: annual change in CPI and retail food prices by month, 2019-24
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CONSUMER INSIGHTS
- Change in financial situation
- Things are looking up for Canadians
- Graph 14: financial situation compared to a year ago, 2024
- Slow and steady improvements to Canadians’ financial situations
- Graph 15: financial situation compared to a year ago, by month, 2023-24
- Younger consumers are feeling more positive than their older counterparts
- Graph 16: financial situation compared to a year ago, by age, 2024
- Multicultural consumers’ optimism is palpable
- Graph 17: financial situation compared to a year ago, 2024
- Household financial situations have everything to do with it
- Graph 18: financial situation compared to a year ago, by household financial situation, 2024
- Consumers’ financial outlooks
- 2025 is looking same, same, but different
- Graph 19: financial outlook for the next year, 2024
- 25-34 year olds stand out from the pack
- Graph 20: “I’ll be a lot better off financially in the next 12 months”, by age, 2024
- Multicultural Canadians are aspiring to have a better financial outlook
- Graph 21: financial outlook for the next year, by race, 2024
- Financially-struggling Canadians are feeling stuck
- Graph 22: financial outlook for the next year, by household financial situation, 2024
- Top concerns
- While rising prices still remains top-of-mind for Canadians…
- Graph 23: top three concerns for the next six months, 2024
- …consumers are feeling less concerned than previously
- Graph 24: rising prices as a top-three concern for next six months, 2023-24
- Consumers are making (minor) adjustments as a result of inflation
- Graph 25: changes in managing finances due to inflation, 2024
- Generational divides are distinct
- Graph 26: top three concerns for the next six months (select), by generation, 2024
- Not everyone can afford to care about climate change or world affairs
- Graph 27: top three concerns for the next six months (select), by household financial situation, 2024
- Recent financial changes
- Non-essentials are…non-essential at the moment
- Graph 28: financial changes from the last two months, 2024
- Female sensibilities prevail while men don’t mind splurging
- Graph 29: financial changes from the last two months (select), by gender, 2024
- Household financial situation dictates what consumers’ priorities become
- Graph 30: financial changes from the last two months (select), by household financial situation, 2024
- Quebecers are especially keep to cut back on luxuries and non-essentials
- Increases in food and drink prices gouge Canadians
- Graph 31: issues affecting consumers over the last two months, 2024
- Multicultural consumers are most affected by higher prices for overseas travel
- Graph 32: affected by higher prices for overseas travel in the past two months, by race, 2024
- Financial behaviours
- Consumers’ past habits and future plans do not look the same
- Graph 33: recent and future planned financial changes, 2024
- Less adding to savings alongside less cutting back
- Graph 34: recent financial changes, by three-month period, 2023-24
- Gen Z’s habits are defining
- Newcomers’ future plans are notable
- Graph 35: financial plans in the next three months, overall vs consumers living in Canada for less than five years, 2024
- Use of extra money
- Most Canadians use extra money to save for a rainy day
- Graph 36: use of extra money, 2024
- Shifts in behaviours emerge over the year
- Graph 37: use of extra money, by month, 2023-24
- Younger generations are using their money differently
- Graph 38: use of extra money (select), by generation, 2024
- Ethnographic vignette: Caroline will never own a home
- Chinese Canadians are not kidding around about investing
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APPENDIX
- Consumer research methodology
- Consumer research questions
- Household financial situation
- Generations
- Abbreviations and terms
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