The Bank of Canada released on April 20 the results from its Canadian Survey of Consumer Expectations for the first quarter of 2026, which captures consumer sentiment before and after the start of the war in the Middle East.
The survey is significant as it provides insights into how Canadians perceive inflation, labour market conditions, and their own financial outlook. This information helps inform policymakers and offers a window into public expectations that can influence economic trends.
According to the report, consumers’ spending plans remained subdued before the war in the Middle East due to ongoing concerns about high prices and economic uncertainty. However, there was a slight improvement compared to previous quarters as pressure from trade tensions eased. One respondent said, “I think maybe we’re through the worst of it now…. It changed with the actions of the Supreme Court in the USA,” referencing a US Supreme Court decision that invalidated some tariffs on Canada. Despite this improvement, high costs for goods and services continued to weigh on households’ willingness to spend.
The survey also found that Canadians still view their job prospects cautiously. Fears over job losses were particularly elevated among workers in sectors vulnerable to artificial intelligence replacing tasks. In follow-up interviews, one participant said, “There are lots and lots of lost jobs because of the fact that we cannot sell to the States, or that the market has become prohibitive.” The special section conducted after conflict began in the Middle East showed most households expect negative effects on both inflation—especially gasoline and food prices—and broader economic growth if hostilities persist.
Many consumers reported substituting toward Canadian-made goods and domestic vacations instead of those involving US products or travel—a trend expected by most respondents to continue regardless of future trade relations between Canada and its southern neighbor.
Artificial intelligence is increasingly present at work; employees mainly use AI for productivity-related tasks like writing or data analysis rather than core business processes. As one respondent noted: “I think it can help and take care of mundane tasks that you don’t need to think about.” Another explained: “Right now, it’s the beginning of AI…. It is used as an aid, not as a replacement.”
Survey data also show households have already begun adjusting spending behaviors due to rising costs linked with global events—21% canceled or postponed trips while nearly three out of ten delayed major purchases following increased travel expenses since conflict erupted overseas.
The Bank operates within Canada’s financial sector focusing on monetary policy oversight according to its official website. Macklem has served as governor since June 3, 2020 according to its official website. The institution manages currency systems—including digital payments—and regulates retail payment platforms as outlined by its official website. It collaborates with university students through initiatives such as monetary policy simulations called Governor’s Challenge according to its official website while striving for price stability alongside fostering economic growth by overseeing financial systems according to its official website.
