BoC surveys: Canadians brace for inflation above 3%
Leah Zlatkin, a licensed mortgage broker at LowestRates.ca in Ontario, told Canadian Mortgage Professional earlier this year that “there’s no clear signal that rates are heading materially lower, and in some cases we’re already seeing lenders adjust pricing upward.”
Spending pulls back as energy costs bite
Consumer spending intentions edged down in Q2 2026, the CSCE found. Higher gasoline prices constrained outlays on travel, dining, and major purchases, while trade tensions compounded cost-of-living anxieties already weighing on households.
“Households expecting the war to raise inflation significantly are also more likely to report other spending changes, such as substituting toward cheaper essentials, reducing discretionary purchases and driving less,” the CSCE said.
“Beyond the war in the Middle East, many consumers also believe trade tensions are raising prices and contributing to economic uncertainty.”
| Factor | Q1 2026 (%) | Q2 2026 (%) |
|---|---|---|
| Tariffs and other barriers to trade | 29.0 | 26.1 |
| Oil and energy prices ▲ | 5.0 | 16.6 |
| Domestic government spending and tax policy | 13.0 | 11.3 |
| Can$/US$ exchange rate | 10.0 | 8.5 |
| The strength of overall demand | 10.0 | 8.4 |
| High housing costs | 9.6 | 7.8 |
| No factors | 4.7 | 4.7 |
| Wages, labour shortages and other worker disruptions | 5.6 | 4.6 |
| Supply chain issues | 3.5 | 4.2 |
| Businesses trying to increase their profits | 4.1 | 3.0 |
| Other | 3.2 | 2.7 |
| Climate change | 2.4 | 2.1 |
One potential buffer for lower-income households: a one-time top-up to the Canada Groceries and Essentials Benefit. Around 44% of CSCE respondents said they expected to receive the payment, with 49% indicating they intended to spend at least one-quarter of the sum.
