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Highlights
- 61% of Canadians are adjusting holiday spending plans due to tariff concerns.
- Average planned holiday spend stands at CAD 2,310.
- 41% intend to cut back, while 39% expect to buy fewer items for the same expense.
- Half of Canadians feel financial stress when thinking about holiday costs.
- 68% are making a greater effort to stick to a holiday budget this year.
According to the latest BMO (TSX:BMO), three-in-five Canadians are rethinking their holiday spending strategies amid tariff-related concerns and rising living costs. The survey highlights that 61% have adjusted their plans, with 25% beginning their shopping earlier to sidestep potential price increases and 37% opting for gifts less affected by tariffs, such as items produced in Canada.
The economic backdrop is adding to the caution. The annual CPI inflation reached 2.4% in September, lifted partly by a 3.8% rise in food prices. Higher unemployment levels have also softened consumer confidence. With these pressures in view, many households are taking a more intentional approach to how, when, and where they spend during the festive period.
Where Canadians Plan to Spend — and Save
Despite budget concerns, Canadians still anticipate spending an average of CAD 2,310 this holiday season across categories including travel (CAD 545), groceries (CAD 517), dining out (CAD 184), electronics (CAD 163), and more. However, 41% plan to reduce their overall holiday spending, while 39% will maintain their budget but expect fewer items for the same money.
The largest cutbacks are expected in areas such as holiday decor (46%), travel (43%), dining out (42%), toys and games (40%), and clothing (36%). Yet, one quarter of Canadians plan to spend more on food and groceries this year, reflecting the desire to prioritize essential and shared experiences.
Consumers are also adopting more mindful habits: 42% are shopping sales, 38% are choosing less expensive gifts, 32% are shifting to more affordable retailers, and 27% are spreading purchases over longer periods. Nearly half (46%) say discounts often encourage them to spend more than intended, underscoring the dual influence of savings and impulse triggers.
Financial Stress, Budgeting and Behavioural Shifts
Holiday spending continues to carry emotional weight. Half of Canadians say thinking about seasonal expenses causes financial stress, and 35% feel pressure to match others’ spending. More than a third admit to sacrificing long-term savings to meet holiday expectations, while 35% have taken on extra work to fund December purchases. Younger demographics—Gen Z and Millennials—are especially likely to do so.
Budget discipline is becoming more prominent this year. 68% are trying harder to plan and stick to a holiday budget, and 17% have saved throughout the year. Still, many anticipate that the financial hangover will last beyond the festivities. Canadians expect it will take more than two months to clear their bills, and 9% remain unsure when, or if, they will fully repay them.
Conclusion
The BMO survey reveals a holiday season marked by caution, adaptation, and financial awareness. Canadians are adjusting their habits in response to tariffs, cost pressures, and economic uncertainty—shopping earlier, budgeting more carefully, and prioritizing meaningful purchases. While concerns persist, these behavioural shifts indicate a focused attempt to manage holiday cheer without sacrificing long-term financial progress.
