Maria Solovieva

Canadian households are scaling back spending plans while businesses navigate higher costs, tariff pressures and uncertainty over trade, according to the central bank’s latest surveys.

TD data show spending on travel, groceries and home-related purchases remained resilient, while World Cup activity lifted select categories in Ontario and B.C.

Core retail sales rose 1.2% in June, posting their second consecutive monthly gain.

Goods spending has recently been driven by necessities.

The household debt service ratio—measured as total obligated payments of principal and interest on credit market debt as a proportion of household disposable income—edged down to 14.57% in the fourth quarter of 2025 from 14.61% in the previous quarter.

Core retail sales—which exclude gasoline stations and fuel vendors and motor vehicle and parts dealers—were relatively unchanged in September.

Canada’s consumer spending outperformance in Q2 helped cushion the economy against the drag from trade tensions, says TD Bank.

Statistics Canada says a rise in retail sales for August was driven by motor vehicle dealers and various subsectors.

Retail sales in Canada fell 0.8% in July 2025, with core retail down 1.2%. Food and clothing stores saw biggest declines, says Statistics Canada.

32% of retail businesses were impacted by the trade tensions in May, compared with 36% in April, said Statistics Canada

The Bank of Canada said the sales outlook remains pessimistic