Canadians plan to spend less this holiday season amid mounting economic unease

Canadian consumers are planning to spend 10% less this holiday season than the year prior, according to PwC’s 2025 holiday outlook report.

Canadians expect to spend an average of $1,675 on gifts, travel, and entertainment this holiday season. Although this represents a 10% decrease from 2024, it is 2% higher than 2023 spending intentions.

BC consumers have the highest planned spend at $1,821, while Quebec and Alberta are tied for the lowest at $1,532.

The report uncovered a significant shift in behaviour driven by rising costs and declining consumer confidence.

Canada’s GDP contracted by 1.6% in the second quarter as the country suffered the impact of an ongoing trade war with its largest trading partner, the United States.

Aside from harming various industries such as automotive, manufacturing, and resources, the aggressive US tariff policy is also driving up prices. Approximately 90% of respondents said they expect prices to be higher this holiday.

Younger consumers, more likely to be affected by job cuts and a tougher entry-level job market, are cutting back spending the most. Gen Z consumers expect to spend 35% less this year while millennials expect to spend 11% less.

Consumers are also looking to pare down costs via second-hand purchases, with 45% planning to shop more for resale, upcycled, or used products, including thrift shopping.

“Faced with persistent economic pressures, consumers are making tough choices, prioritizing family spending, while tightening belts elsewhere," said Elisa Swern, national retail and consumer leader at PwC Canada. "This isn’t just about spending less; it’s about a fundamental shift towards conscious consumption, where every dollar must deliver tangible value and purpose."

While consumers aren’t planing to reduce spending on family, they plan to cut back on gifts for friends, pets, and themselves compared to last year.

As a consequence of tariffs and deteriorating diplomatic relations with their southern neighbour, 78% of Canadians plan to seek out alternatives to US-made goods. Relatedly, nearly half (49%) are willing to pay more for Canadian-made products.