Canadians continue to feel uneasy about the economy and remain cautious with their spending, despite signs of economic stabilization, according to a new survey from the Bank of Canada.
The central bank’s latest Survey of Consumer Expectations shows households are still worried about high prices, job security and the impact of ongoing trade tensions with the United States. Respondents reported a higher perceived risk of missing debt payments and losing their jobs, while expecting inflation to remain elevated in the near term, largely due to tariffs.
Those concerns are weighing on spending plans. Many Canadians cited high prices, housing costs and economic uncertainty as key reasons for holding back, and more respondents said their financial situation had worsened compared to the previous quarter. Overall consumer expectations declined in the fourth quarter and remain well below pre-pandemic levels.
At the same time, some optimism is emerging. Survey participants felt more confident about finding or voluntarily leaving a job, and long-term inflation expectations fell below pre-pandemic norms. Still, sentiment has not recovered to where it stood before the U.S. trade conflict began last year.
Claire Fan, a senior economist at Royal Bank of Canada, said the gap between consumer sentiment and actual economic data continues to widen, even as inflation stays within the central bank’s target range and Canada avoids a recession.
While nearly 60 per cent of respondents believe the worst of the trade conflict has passed or been avoided, many still view the labour market as weak, particularly workers in trade-exposed sectors.
Rising grocery costs remain a major pressure point. Data from Statistics Canada shows food inflation averaged 3.5 per cent in 2025, up from 2.2 per cent the year before. Mike von Massow, a food economist at the University of Guelph, said consumers feel food price increases more acutely because groceries are a frequent and unavoidable expense.
Economists say that while broader economic conditions may be stabilizing, lingering uncertainty and high living costs continue to weigh heavily on household confidence.