The Bank of Canada's latest survey, conducted online between January 29 and February 19, 2025, with follow-up phone interviews from February 20 to 25, sheds light on Canadian consumer sentiment amid ongoing trade conflict with the United States. The findings reveal a significant decline in consumer confidence, particularly in the labor market.

Consumers are expressing heightened concerns about job security, driven by fears that tariffs may affect industries dependent on U.S. trade. One participant from the construction sector stated, "Because of tariffs, we can’t rely on the US for raw materials. The company I work for has gone on a break until they can figure out where else to source their materials from." Similarly, a respondent working in logistics warehousing mentioned, "My job might be at risk due to tariffs because I work in logistics warehousing."

Inflation expectations among consumers have risen for the first time since 2022, reflecting worries that the trade conflict will lead to a higher cost of living. The report notes, "In addition, consumers reported that they view tariffs and the Can$/US$ exchange rate as the most important factors hindering the Bank’s ability to control inflation." One respondent elaborated, "Tariffs are going to impact us for sure, the end consumers, because obviously the price increases would have to be passed on to us in every sense..."

Furthermore, the survey highlights a trend of consumers gravitating towards Canadian-made goods. Over half of the participants indicated a preference for domestic products to support the Canadian economy and in protest against U.S. administration policies. One consumer stated, "I don’t agree with the tariffs, and I hope they’re abolished. But in the meantime, I think the best we can do is support Canadian products and just try and fuel the Canadian economy as much as possible."

Despite these challenges, there appears to be a divided sentiment about the lasting impact of tariffs on inflation, with most consumers anticipating a temporary effect. The comprehensive insights can inform policymakers as they navigate these economic challenges and seek to mitigate impacts on Canadian households.