The Canadian Survey of Consumer Expectations for the first quarter of 2025 indicates growing unease among Canadian consumers amid an escalating trade conflict with the United States. The survey was administered through an online panel from January 29 to February 19, 2025, and included follow-up phone interviews from February 20 to 25, 2025.
The prevailing uncertainty surrounding US trade policies has contributed to a decline in consumer confidence. There is a marked increase in concerns about job security, particularly in sectors that are heavily reliant on trade between Canada and the US. A construction worker expressed concern: "Because of tariffs, we can’t rely on the US for raw materials. The company I work for has gone on a break until they can figure out where else to source their materials from." Another individual working in logistics warehousing added, "My job might be at risk due to tariffs."
As job security alarms grow, wage growth expectations have declined across both public and private sectors, with economic conditions playing a more significant role in shaping these outlooks. Alongside, Canadian consumers are increasingly pessimistic about their financial health. They expect their finances to deteriorate over the coming year, with the probability of missing a debt payment rising.
Inflation concerns are also dominating consumer expectations. Many expect the trade conflict to drive up living costs, evidenced by a rise in short-term inflation expectations, marking the first increase since 2022. Most consumers point to tariffs and the Can$/US$ exchange rate as major factors hindering the Bank of Canada's ability to control inflation, though they anticipate the inflationary impact to be shorter than other domestic pressures.
Uncertainty has made consumers more cautious about spending. While previous quarters showed stronger consumption plans, the current sentiment is more conservative. "I’m definitely spending less and saving more because the future is so uncertain. I like to be ahead of what might happen in the economy—for example, my job security might get worse," one consumer shared. The trade conflict is prompting more Canadians to buy domestic products instead of US goods.
Moreover, attitudes toward housing and credit have shifted, with more negative views on credit access and expectations for unchanged interest rates over the next year.
Economic perturbations resulting from the US trade conflict are reshaping Canadian consumer behavior and expectations. While some remain hopeful that diversification and a 'Buy Canadian' mentality might eventually strengthen the economy, the immediate sentiment indicates apprehension and preparation for potentially adverse economic conditions.