The Bank of Canada has released the results of its Canadian Survey of Consumer Expectations for the second quarter of 2025. Conducted online from April 24 to May 15, with follow-up phone interviews from May 20 to 26, the survey provides insights into consumer attitudes regarding spending plans, the labor market, and personal finances.
The CSCE indicator, which summarizes these opinions, declined this quarter due to weakened spending intentions amidst ongoing tariff concerns. “Consumers continued to see the labour market as soft,” the report notes, though fears of job loss have slightly decreased since last quarter.
Trade conflicts are influencing consumer behavior, with many respondents expressing a preference for Canadian goods and domestic vacations. Despite marked increases in motor vehicle price expectations over the next year, inflation expectations for essential goods and services have fallen. Tariffs are cited as a significant factor impacting the Bank’s ability to manage inflation.
“Tariffs are impacting my job a little bit,” said an employee from a manufacturing company during follow-up interviews. Consumers remain cautious about their financial health and economic outlooks. Approximately two-thirds anticipate a recession within the next year.
Spending intentions continue to weaken, driven by economic uncertainty and high costs in housing and other areas. More than half plan to reduce spending on U.S. goods and vacations while prioritizing Canadian-made products despite price considerations.
Inflation expectations remain elevated post-pandemic but stable compared to last quarter. Many consumers foresee tariffs contributing significantly to future inflation pressures, especially concerning vehicle prices.
Overall, more consumers now view tariffs as impeding the Bank’s control over inflation compared to previous quarters.
