Tariffs and trade tensions continue to affect consumers’ spending plans and perceptions about their financial health, according to the Bank of Canada’s Canadian Survey of Consumer Expectations, conducted through an online panel from July 31 to August 21.
Many survey respondents expressed a desire to prioritize spending on Canadian goods and vacations in Canada, said the Bank, adding that the survey took place before the Canadian government announced it would remove some counter-tariffs.
Other key findings:
- Consumers saw a further deterioration in the labour market in the third quarter, driven in part by a sharp drop in job-finding prospects for public sector workers.
- Consumers continue to think tariffs will generate inflationary pressures. Expectations for short-term inflation remain above their pre-pandemic averages, and expectations for longer-term inflation have picked up again. A large share of survey respondents cited tariffs as the most important factor affecting the Bank of Canada’s ability to control inflation.
- Overall, the CSCE indicator—a measure that summarizes Canadian consumers’ opinions about their spending plans, the labour market and their personal finances—rose modestly in the third quarter from its most recent low. Slight improvements in financial health and household spending intentions contributed to this rise, while perceived labour market conditions remained negative.
The Bank’s Business Outlook Survey was conducted by in-person, video and phone interviews from August 7 to September 3, 2025. The large majority of interviews were conducted before the announcement of the removal of certain Canadian counter-tariffs.
Key findings:
- Firms’ outlooks and intentions remain subdued despite a gradual improvement in sentiment and a slight easing of perceived uncertainty.
- Expectations for growth in domestic and export sales remain soft due to concerns about the broad economic effects of trade tensions.
- Few firms reported binding capacity constraints or labour shortages, and most businesses do not expect to increase current staffing levels.
- Soft demand and uncertainty related to trade tensions persist in holding back investment intentions, with close to half of firms prioritizing routine maintenance over expansion.
- Businesses continue to expect cost increases due to tariffs and trade uncertainty. However, many said that weak demand is limiting their ability to pass these cost increases through to their selling prices.
- Firms’ one-year-ahead inflation expectations are below the peak reached earlier in the trade conflict and are now only slightly above late-2024 levels.
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