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CANADIAN CONSUMER CONFIDENCE: WHY CANADIANS ARE FEELING SO DOWN ABOUT MONEY (AND WHAT YOU CAN DO ABOUT IT)

canadian consumer confidence
canadian consumer confidence

Canadian consumer confidence

Canadian Consumer Confidence: Introduction

Hey everyone, have you noticed things feeling a little…off lately? Maybe you’re thinking twice about that new gadget or feeling a little nervous about your next grocery bill and your overall financial situation. You’re not alone. I was looking at some recent Canadian economic news, and it turns out that Canadian consumer confidence is lower than it has been in a very long time. Seriously, like, ever. So, what’s going on? Let’s break it down.

Factors Influencing Canadian Consumer Confidence

So, what’s actually causing this dip in how good we feel about our money situation? It’s not just one thing; it’s a bunch of stuff all piling up. Let’s break it down, shall we?

Inflation Trends and Consumer Expectations

Okay, first up, inflation. You know, when everything gets more expensive? Yeah, that’s a biggie. We’re not just seeing prices go up a little; they’re climbing pretty fast. And it’s not just the prices themselves; it’s the feeling that prices are going to keep going up. When people expect things to get pricier, they start holding back on spending, especially for major purchases. That mindset messes with consumer confidence.

Impact of Personal Experiences on Economic Outlook

Here’s the thing: numbers are one thing, but personal experiences? Those hit way harder. If you’ve recently lost your job, or your friend’s business is struggling, or you’re seeing your grocery bill skyrocket, that’s going to affect how you feel about the Canadian economy. It’s not just about the stats; it’s about what’s happening in your own life and the lives of people around you. Those personal stories drive home the feeling that things are tough.

High Inflation and Interest Rates

Now, let’s throw high interest rates into the mix. When interest rates go up, it means things like mortgages and car loans get more expensive. Suddenly, you’re paying way more for the same stuff. This, combined with high inflation, creates a double whammy for a lot of folks. It’s like, “Not only are things costing more, but I’m paying more to borrow money too?” It’s a recipe for financial stress and a lack of confidence in both your personal and Canada’s economic growth.

Home Purchase Intentions and Economic Sentiment

Do you know how big of a deal buying a house is? Well, when people start feeling less confident about the economy, they’re way less likely to think about buying a home. It’s a huge commitment, right? If you’re worried about your job or the economy, you’re probably going to hold off. This drop in home purchase intentions is a really strong sign that people are feeling uneasy about the future.

Labour Market Perceptions

And then there’s the job market. If people start feeling like jobs are less secure, that’s a massive confidence killer. You know, “Will I still have a job next month?” or “Will I be able to find a new one if I lose this one?” Those worries are huge. If the job market feels shaky, people are going to be way more cautious with their spending. It’s like, you don’t want to go out and splurge if you are worried about your job security.

So, to sum it up: rising prices, personal struggles, high interest rates, people being scared to buy houses, and a shaky job market? That’s a lot to deal with. And it explains why Canadians are feeling so down about money right now. It is a bunch of factors all compounding at the same time.

canadian consumer confidence
canadian consumer confidence

Canadian Consumer Confidence: Trade Tensions and Their Effects – Why We’re All Feeling the Pinch

Okay, so we’ve talked about inflation and interest rates, but let’s not forget about the elephant in the room: trade tensions, especially with our neighbors down south. It’s not just some abstract political thing; it’s hitting our wallets hard.

U.S. Tariffs and Economic Forecasts

You know, when countries start slapping tariffs on each other’s goods, it’s like throwing a wrench into the whole economic machine. And that’s exactly what’s happening with the U.S. tariffs. It’s not just about some products getting a little more expensive; it’s about the whole vibe.

Here’s the deal. When the U.S. puts tariffs on Canadian goods, it makes those goods more expensive for American consumers. That means less demand, which can hurt Canadian businesses. And when businesses are hurting, people start worrying about their jobs. It’s like a domino effect.

But it’s not just the current tariffs that are the issue, it’s the uncertainty about future tariffs. You know, “Will they add more? Will they take some away?” That kind of guessing game makes it hard for businesses to plan. And when businesses are hesitant, they hold back on investments and hiring.

And here’s the thing about economic forecasts: they’re not just numbers on a screen. They shape how people feel about the future. When economists predict slower growth or higher unemployment because of trade tensions, people take that to heart. They start thinking, “Okay, maybe I shouldn’t buy that new car after all,” or “Maybe I should save more, just in case.” They become very worried about personal finances.

It’s like, imagine you’re planning a road trip, but you keep hearing there’s a huge storm coming. You’re probably going to think twice about whether you should even go, right? That’s what these trade tensions are doing to our economic plans.

The real kicker is that it’s not just big businesses that are affected. Small businesses, the backbone of our economy, are feeling it too. They’re struggling with higher costs and less demand, and that’s a huge problem.

So, to sum it up, U.S. tariffs are making things more expensive, creating uncertainty, and messing with economic forecasts. And that’s making Canadians feel uneasy about their money situation. It’s like, we’re all just waiting to see what happens next, and that’s not a good feeling.

Understanding the Canadian Consumer Confidence Index: What It Tells Us

What’s This “Canadian Consumer Confidence” Thing Anyway?

Okay, so there’s this thing called the Consumer Confidence Index (CCI). It’s like a national mood ring for money. It tells us how good or bad people feel about the economy. And guess what? It matters a lot. When people feel good, they spend money, which helps businesses and the whole economy. When we feel worried, we hold back, and that can slow things down. It’s like a big cycle.

Think of it this way: if you’re feeling good about your job and your future, you’re more likely to go out for dinner, buy new clothes, maybe even plan a vacation. But if you’re worried about losing your job or if prices are going up like crazy, you’re probably going to stick to cooking at home and saving every penny.

A Quick Look Back: Canada’s Money Mood Over Time

Canada’s money mood has always gone up and down. For example, during the big money crash in 2008, everyone was super worried (and for good reason!). Now, in 2025, we’re seeing another big dip. The lowest level of Canadian consumer confidence since the 2008 global financial mess. Things like trade issues and the rising cost of living are making people nervous. It’s like history is repeating itself, but with a modern twist.

The Numbers Don’t Lie: What’s Happening Right Now?

So, here’s the scary part. In March 2025, the CCI dropped to just 44.2%. That’s a huge drop, like, the lowest it’s ever been. It’s been falling for months now. What does this mean? People are worried about money.

Why Are We So Worried?

There are a few big reasons. First, there’s this trade situation with the U.S. It’s making prices go up, which is hard on everyone. Think about groceries and gas, everything costs more. Plus, there’s a lot of uncertainty about what’s going to happen next.

As Priscilla Thiagamoorthy, a senior economist at BMO, put it,

“Canadian consumers are feeling very downbeat these days. And, it’s no wonder, given a brewing trade war with the U.S., stirring price pressures, an upcoming federal election, and policy uncertainty.”

It’s a perfect storm of money stress.

How This Worry Hurts the Economy (And You)

When people are worried, they save more and spend less. This can slow down the whole economy. Businesses might not hire as many people, and things can get even harder. It’s like a snowball effect. Even if there’s some good economic news, if people aren’t spending, it doesn’t matter.

What Can We Do About It?

Okay, so what can we do? Here are some tips:

  • Track your spending: Know where your money is going. Use an app or a simple notebook.
  • Cut back on extras: Do you need that extra streaming service?
  • Save, save, save: Try to build up an emergency fund. It’s like a safety net for your money.
  • Think smart about investing: If you have some extra cash, look into low-risk ways to make it grow.

And here’s the thing: it isn’t only up to us. Our leaders need to help, too. They need to be clear about what’s happening, support small businesses, and make sure people have the resources they need.

canadian consumer confidence
canadian consumer confidence

Canadian Consumer Confidence: Real Stories, Real Struggles

In my work as a licensed insolvency trustee, I talk to everyday Canadians, and their stories are eye-opening. One mom told me they’ve had to cut back on eating out. A small business owner said he’s had to raise prices, but his customers are struggling too. These stories show the real impact of these economic worries.

If you’re feeling stressed about money and especially your household finances, you’re not alone. There are resources out there. Check out financial counseling services, local support groups, and government assistance programs.

Look, times are tough right now. But we can get through this. By being smart with our money, supporting each other, and pushing for good policies, we can make things better. We’re all in this together.

I hope you’ve found this Canadian Consumer Confidence Brandon’s Blog helpful. If you or someone you know is struggling with too much debt, remember that the financial restructuring process, while complex, offers viable solutions with the right guidance.

At the Ira Smith Team, we understand the financial and emotional components of debt struggles. We’ve seen how traditional approaches often fall short in today’s economic environment, so we focus on modern debt relief options that can help you avoid bankruptcy while still achieving financial freedom.

The stress of financial challenges can be overwhelming. We take the time to understand your unique situation and develop customized strategies that address both your financial needs and emotional well-being. There’s no “one-size-fits-all” approach here—your financial solution should be as unique as the challenges you’re facing.

If any of this sounds familiar and you’re serious about finding a solution, reach out to the Ira Smith Trustee & Receiver Inc. team today for a free consultation. We’re committed to helping you or your company get back on the road to healthy, stress-free operations and recover from financial difficulties. Starting Over, Starting Now.

The information provided in this blog is intended for educational purposes only. It is not intended to constitute legal, financial, or professional advice. Readers are encouraged to seek professional advice regarding their specific situations. The content should not be relied upon as a substitute for professional guidance or consultation. The author, Ira Smith Trustee & Receiver Inc., and any contributors do not assume any liability for any loss or damage.

canadian consumer confidence
canadian consumer confidence
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Brandon Blog Post

IS CANADA IN RECESSION? MOST CANADIANS SAY YES TO AN INTENSE RECESSION

Is Canada in recession?

Statistics Canada recently released data showing that inflation rose to 7.7% year-on-year in May, up from 6.8% in April. This was the highest reading since January 1983 and well above the 7.3% expected by economists. The inflation index rose 1.4% from the previous month, with gasoline prices, hotel prices and car prices being the main reasons for the rise in May.

Many economists believe core measures are a better indicator of underlying price pressures, as it excludes food and energy costs. The recent average of this measurement, according to Statistics Canada, increased to 4.73% which is the highest level in the last 32 years! The worst news, their inflation expectations are not stopping.

In this Brandon’s Blog, I discuss is Canada in recession and look at what effect it might have on Canadians.

Is Canada in recession? What is a recession?

In the most basic terms, a recession is not only when economic growth is curtailed but is a period of economic decline marked by a contraction in economic activity. Most governments define a recession as two straight quarters in which the economy contracts by at least 1.5 percent. Economists define it as negative gross domestic product (GDP) growth. This definition doesn’t take into account consumer sentiment, but that’s an important metric to pay attention to since it affects consumer spending.

Fears of a recession have been rising in recent weeks as central banks around the world try to bring inflation down from the highest in decades by raising interest rates quickly. A new poll finds that nearly 8 in 10 Canadians believe the Canadian economy is in or near a recession. More than half of those Canadians are starting to cut back on spending to cope with the recession.

According to a recent survey of 1,517 Canadians by Yahoo and pollster Maru Public Opinion, a whopping 78 percent of respondents believe Canada is now in a recession or approaching a recession. Of those, 23% believe Canada will enter a recession within the next three months, while as many as 55% believe the Canadian economy is now in a recession.

is canada in recession
is canada in recession

Is Canada in recession right now? What the economists say

Canadian economists were surveyed by Finder on their inflation and economic recession expectations. Most said Canada has recession risk and is heading for a recession. They say we can expect it to happen anytime between 2023 and the first half of 2024. Most thought it would happen in the first six months of 2023, another quarter thought it would take a year to manifest. Economists have pointed to the pandemic, inflation and interest rate hikes as the reasons for the recession in Canada (isn’t the hot money only flowing into the housing market the reason for the recession?).

Finder explains how economists try to time recessions. Canada is headed for a normal summer as pandemic restrictions are lifted, but a new variant of the COVID-19 pandemic could emerge in the fall that could tip us into a Canadian recession by this time next year. What they cannot tell us is whether it will be a mild recession or a deep recession.

Why Is Canada likely to experience a recession?

In a single word – inflation. Inflation is rising and our federal government is doing nothing to quell the inflation expectations. This is causing the Bank of Canada to try to tame inflation by raising interest rates. This increases the risk of a recession. In fact, many economists told Finder they expect “aggressive” rate hikes in the coming year. Most of those polled believe there will be at least four more rate hikes this year.

Fears of a recession have been rising in recent weeks as central banks around the world try to bring inflation down from the highest in decades by raising interest rates quickly. The Bank of Canada is one of the central banks trying to restore soaring inflation to its target range of 1% to 3%. On June 1, the Bank of Canada announced a rate hike of 0.5%.

The timing of the recession is not easy to grasp, and much depends on what happens with Russia’s invading Ukraine. Murshed Chowdhury, an associate professor at the University of New Brunswick, expects the recession to continue into the first half of 2024. How long the supply-side problems will last and the escalation of the Russian-Ukrainian war will play a big role in deciding how things turn out.

The rise in prices causing inflation can be attributed to a number of factors, including poor fiscal management by the federal government. Other factors include record highs in commodity prices such as oil and wheat. Unfortunately, wage growth for most Canadians has not kept pace with inflation. Wages have risen 2.7% over the past two years, compared with inflation of 3.4% over the same period.

is canada in recession
is canada in recession

Is Canada in recession? What will happen to the economy of Canada?

Consumer prices in Canada accelerated to their highest level in 40 years, Bloomberg reported, adding pressure on the Bank of Canada to continue aggressively raising interest rates in the coming weeks.

Markets are almost entirely confident that the Bank of Canada will raise interest rates by 75 basis points next month, which will lift its policy rate to 2.25%. The rate is expected to be as high as 3.50% by the end of the year. The preferential loan interest rate offered by commercial banks is usually more than 2 percentage points higher than the policy interest rate.

Prime Minister Justin Trudeau’s government has also come under pressure from opposition parties and economists to do more to contain inflationary pressures and help households offset the cost of living, though the Trudeau government has been wary of any new measures.

Like other countries, Canadian households have been hit by record gasoline prices and soaring food prices. After a slight pullback in April, gasoline prices surged again in May, rising 12% for the month and 48% from a year earlier. Food prices rose by a smaller 0.8% in May but were up 8.8% from a year earlier.

Given that gasoline prices rose further in June, the 7.7% annual figure may not even be representative of the peak annual price increase. There were more signs that imported inflation was affecting domestic prices, with the cost of services rising 5.2 percent from a year earlier, the fastest pace of growth since 1991.

The cost of living is rising twice as fast as the average Canadian wage, creating significant headwinds for the economy. Unfortunately, the Canadian government and the Bank of Canada are treating this as if inflation is all caused by domestic factors when it is really global. Raising interest rates aggressively, an old tool, cannot solve a globally induced imported inflation spike.

The inflation we are experiencing now is a result of all the shocks to the Canadian economy: COVID-19, monetary policy-induced recession factors when the Bank of Canada kept interest rates at their lowest ever levels during the COVID-19 pandemic, the supply side problems because every major world economy effectively shut down for the better part of 2 years, the war in Ukraine causing shortages and therefore price spikes. None of it is a Made In Canada problem, yet the Bank of Canada and the federal government are treating it as if it was homegrown.

Is Canada in recession? What happens if we experience a recession?

Canadians’ purchasing behaviour is already beginning to change. A poll conducted by Nanos Research for Bloomberg News indicates:

  • 52% of Canadians surveyed say they have adjusted their spending habits, set stricter priorities and started consciously spending less in the past month.
  • The majority of Canadians expressed concern about the state of the economy, with 62 percent of Canadians believing that the Canadian economy was on the wrong track.
  • Rising prices have led 32 percent of Canadians to believe they are in a worse financial position than they were the previous month. Only 8 percent of Canadians said their situation had improved.
  • Regionally, the poll showed that residents of Atlantic Canada and Western Canada are particularly concerned about the economy.
  • In the Atlantic region, 75% of respondents believe the Canadian economy is heading in the wrong direction; in Manitoba and Saskatchewan, 77%; in Alberta, 66% of people hold this view.
  • 41 percent of Canadians said they were in a worse financial position today than they were last year. This is the second-highest reading since 2008.

This consumer sentiment, runaway inflation and the Bank of Canada and the federal government using old tools to fix a new problem will have negative consequences for Canadian businesses. Consumer spending which previously fueled the Canadian economy, now reduced consumer spending, this will most likely place is Canada in recession.

Lower company sales will lead to job losses and our record low unemployment rate will increase possibly to a new high when the current job market changes for the worst during a recession. Business investment will be reduced and what investment is made, will be more in systems and technology than people. There will be a resultant drop in GDP. Certain asset categories will drop dramatically in price as capital flees places like the Canadian stock market for investments seen to be safer.

is canada in recession
is canada in recession

Is Canada in recession? How to protect yourself from a recession

Our spending and investing habits directly impact the economy. This year so far, it’s been a rough ride. However, the majority of how a recession affects us is within each of our own control. The rest of it, the minority is because of forces beyond our control.

The economy will vary from year to year. Our spending, saving and investing habits directly impact the economy. It is important for all of us to make smart financial decisions now so we can weather the storm when the economy dips. Is Canada in recession? Based on the above, not right now, but, it could be soon. Here are my tips on how to protect yourself from a recession.

It’s important to have an emergency fund

When a recession hits, you can get fired and the value of your investments can plummet. One of the best ways to protect yourself from financial distress or additional debt is to increase your emergency savings.

That way, even if there are unexpected expenses, or your income is affected, you’ll have a cushion to protect yourself and your family. I always recommend having an emergency fund that allows you to survive for a 6-month period.

Boost your employment prospects

When a recession hits, job security can be at risk. To safeguard your income, you should consider finding a side hustle in addition to your regular job. This can serve two key purposes—helping you grow your emergency fund and providing you with extra income.

You should focus on developing job skills that will help improve your chances of not being laid off. Time management, communication, and attention to detail are all important skills to focus on.

Budgeting

Look at your family household expenses. Cut back on anything that is not necessary spending. If necessary, use cash to pay for purchases and not a credit card. We tend to spend less when we have to count it out in cash rather than tapping or swiping a card.

That way your money will go much further. Remember, during a recession, cash is king!

Pay down debt

Do everything you can to pay down your debt before a recession hits. The more debt you have, the more of your money goes to interest payments. If you have variable rate loan debt, as the Bank of Canada continues to crank up interest rates, the cost of that debt increases.

If you have fixed-rate debt and it comes up for renewal time, say like your house mortgage, you will be forced to renew at a higher interest rate. So, by paying down debt, you are insulating yourself as best as possible against the negative effects of the recession on your outstanding debt.

The economy may or may not slip into a recession but based on what the economists believe, more likely than not, eventually, it will. Recessions can last for a long time, or they can end quickly. However, the more prepared you are, the lower your chances of suffering a prolonged financial shock in the aftermath.

You may also want to read 2 other Brandon’s Blogs:

Is Canada in recession? What if your debt is too much for you?

I hope you found this is Canada in recession Brandon’s Blog interesting. Among the many problems that can arise from having too much debt, you may also find yourself in a situation where bankruptcy seems like a realistic option.

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is canada in recession
is canada in recession
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