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BMO’s Real Financial Progress Index: Three out of five Canadians are adjusting holiday spending amid tariff concerns  

November 14, 2025 | Thought Leadership

The latest BMO Real Financial Progress Index reveals 61% of Canadians are changing their holiday spending plans this year in anticipation of rising costs caused by tariffs. 

  • 37% are trying to buy gifts minimally affected by tariffs, including purchasing goods made in Canada.  
  • 25% started their holiday shopping earlier to avoid potential price increases. 
  • 15% are budgeting to spend more on gifts in anticipation of higher prices. 

“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. Though not elevated, annual CPI inflation has 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.”

— Sal Guatieri, Senior Economist, BMO

Additional findings from the BMO survey on Canadians’ holiday spending plans reveal:  

  • The holiday price tag:
    • Canadians plan to spend an average of $2,310 this holiday season, including travel costs like flights, tickets and accommodations ($545), food and groceries ($517), dining out ($184), entertaining ($178), electronics ($163), clothing ($160), alcohol ($119), charitable giving ($116), toys and games ($95), holiday decorations ($57) and other holiday expenses ($175). 

  • Unwrapping spending: 
    • Two in five (41%) plan to cut back on spending amid concerns about the rising cost of living, while almost as many (39%) expect to spend the same but get fewer items. Canadians plan to cut spending most on holiday decorations (46%), travel (43%), dining out (42%), toys and games (40%), alcohol (38%), clothing (36%) and entertaining (36%). However, 25% plan on spending more on food and groceries this holiday season compared to last year.  
    • With concerns about the rising cost of living top of mind, Canadians are adjusting their shopping habits including shopping for sale and/or clearance items (42%), buying less expensive gifts (38%), making fewer big purchases (31%), shopping at more affordable brands and/or discount retailers (32%) and spreading out their purchases over several weeks and months (27%). 
    • Nearly half (46%) say holiday sales and discounts cause them to spend more or purchase more gifts than they originally intended. 

  • The cost of holiday cheer:  
    • While half (50%) of Canadians say thinking about holiday spending causes financial stress, over a third (35%) feel pressured to keep up with others’ spending even if they cannot afford it. 
    • Over a third (36%) knowingly sacrifice their long-term savings to afford their holiday spending plans.  
    • 35% have taken on extra work to pay for their holiday spending, with Gen Z (55%) and Millennials (46%) being the most likely to do so.  
    • Canadians believe it will take them an average of more than two months to pay off their holiday bills. However, 9% are not sure when or if they will be able to pay off these bills.  

  • Making a list and checking it twice 
    • One quarter (25%) plan on reducing the number of people on their holiday gift list.  
    • Nearly a third (31%) are not confident they will be able to afford every item on their holiday gift list.  

  • Stocking up on savings: 
    • Over two thirds (68%) are trying harder to set and stick to a budget for their holiday spending compared to previous years. The figure increases to 75% among those more concerned about inflation or a possible economic recession. 
    • Nearly two in five (38%) have reduced their spending on other gifts throughout the year such as birthdays, anniversaries, etc. to splurge on holiday gifts.   
    • 17% have saved throughout the year to be able to afford their holiday spending plans. 

“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. By starting early, setting a budget, focusing on meaningful purchases and working with an advisor to develop a personalized plan, Canadians can celebrate the season feeling more empowered to take control of their finances and staying on track towards making real financial progress.”

– Anthony (Tony) Tintinalli, Head, Specialized Sales, BMO 

To learn more about how BMO can help clients make financial progress, visit www.bmo.com/main/personal. 

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