The Bank of Canada has released the results of its Canadian Survey of Consumer Expectations (CSCE) for the third quarter of 2025. The survey, conducted online from July 31 to August 21, 2025, with follow-up phone interviews from August 22 to 28, provides insight into consumer attitudes toward spending, inflation, and the labour market.

According to the report, tariffs and ongoing trade tensions are continuing to shape how Canadians view their financial health and spending plans. Many respondents indicated a preference for buying Canadian goods and vacationing within Canada. Despite a modest improvement in perceptions of financial health and household spending intentions compared to previous quarters, overall consumer sentiment remains below levels seen before the current trade conflict with the United States.

Consumers noted that tariffs are contributing to inflationary pressures. Short-term inflation expectations remain higher than pre-pandemic averages, while long-term expectations have increased again this quarter. A significant portion of respondents identified tariffs as the main factor affecting the Bank of Canada's ability to manage inflation.

The CSCE indicator—a summary measure reflecting consumers’ opinions on spending plans, labour market conditions, and personal finances—rose slightly in the third quarter but remains well below its historical average. Improvements were mainly attributed to slight gains in financial health and household spending intentions; however, perceptions about labour market conditions remained negative.

Consumers who believe that the worst effects of trade tensions are still ahead reported feeling less financially secure. "Tariffs themselves have created an impact, but the uncertainty has also created an impact," one respondent said.

Spending intentions showed a modest increase among those who felt their financial situation had improved or stayed the same since last year. One participant commented: “Yes, gas has come down. So that’s why our spending is up.” However, groups such as younger people or those with only a high school education saw declines in their expected spending.

Barriers cited by consumers include high prices for goods and services, economic uncertainty, and elevated housing costs. Many consumers continue to prioritize purchasing Canadian-made products but are not willing to pay significantly more for them—most would accept no more than a 10% premium. As one respondent explained: “I’m going more out of my way now to buy Canadian. I would say I am willing to pay more these days for products made in Canada. Not a substantial amount more. I’d say 5%–10% more at the most.”

About two-thirds of survey participants expect Canada’s economy will enter a recession within twelve months—a notable increase from before trade tensions began earlier this year. One person stated: “I think we’re honestly in a recession, or going to be in a really bad recession pretty soon. I don’t see it getting any better for quite some time.”

Labour market confidence declined during this period despite slight improvements elsewhere; consumers reported lower chances of finding or voluntarily leaving jobs compared with previous quarters—a trend especially pronounced among public sector workers following federal government expenditure reviews. One public sector employee remarked: “The government’s priority is to rein back spending, and that’s having a direct impact on staffing. It’s frustrating because I want to stay in the public sector and do something for Canadians, but the opportunities are shrinking.”

Concerns about job loss remain higher than before recent trade disputes began—particularly among workers whose sectors rely heavily on cross-border commerce between Canada and the United States—with many citing economic outlooks or business conditions as key factors influencing their sense of job security.

Expectations regarding inflation remain elevated relative to pre-pandemic norms; several interviewees linked anticipated price increases directly with tariffs: “Tariffs are causing a lot of things in Canada in general to just be more expensive than they [otherwise] would be,” said one respondent.

Vehicle prices were highlighted as an area where consumers expect significant cost increases once inventories purchased prior to tariff implementation run out: “Vehicles for sale right now were bought [by car dealers] before tariffs came in place. Once the pre-tariff stock of vehicles is gone then we will see a really big impact on vehicle prices,” another participant observed.

A growing share of respondents consider tariffs as hindering efforts by monetary authorities like the Bank of Canada when it comes to controlling inflation; approximately seventy percent believe that most serious effects from trade-related inflation have yet to materialize.

Further information about survey methodology or findings can be found on the Bank of Canada website. The report notes that opinions expressed reflect those surveyed rather than official views held by the central bank itself.