Canadians are being more cautious and selective with their money: report

Canadians are becoming more selective about what they buy, prioritizing essentials, value, quality and discretionary experiences. Photo by Peter J. Thompson/Postmedia News files

Article content

Canadian consumers have not reduced their spending in the face of a struggling economy, but they are are being more cautious and selective with their money, according to new transaction data from Moneris Solutions.

Article content

The payment processing company, which handles roughly one in three transactions in Canada, said total domestic spending was essentially flat year over year in the first quarter of 2026, down only 0.27 per cent, while the average transaction size rose 0.18 per cent.

Article content

Article content

Article content

The data suggest consumers are still participating in the economy but are becoming more selective about what they buy, prioritizing essentials, value, quality and discretionary experiences.

Article content

Article content

An Angus Reid survey commissioned by Moneris said nearly half of Canadians believe the economy is struggling, and only 13 per cent expect to see improvement over the next six months. Compared with June 2025, the findings mark a 15-point rise in economic concern and seven-point drop in optimism, the company said.

Article content

Meanwhile, 43 per cent of respondents said they expect to reduce spending on non-essential items.

Article content

While overall spending remains stable, a closer look at spending by category shows a clear reallocation of consumer dollars.

Article content

Grocery purchases rose 2.6 per cent year over year, while spending at mass merchandisers such as Walmart and Costco increased 6.9 per cent. Department stores, including Hudson’s Bay and Simons, saw purchases fall eight per cent, while apparel and household spending each declined two per cent.

Article content

This suggests Canadians are prioritizing essential and affordable retail items while pulling back from more discretionary purchases.

Article content

Article content

One type of discretionary spending Canadians have not given up on is entertainment.

Article content

Article content

Entertainment spending rose 11 per cent in the past year, with average transaction size up 17 per cent, indicating Canadians still value experiences. Airline spending also increased 11 per cent, though with smaller average transaction sizes, pointing to potentially shorter or more cost-conscious travel.

Article content

The data also suggest shifts in foreign spending are changing how tourists experience Canada, with tourists allocating more of their budgets to activities rather than accommodation. Entertainment spending by visitors rose 21 per cent, while hotel spending declined nine per cent.

Article content

Regional spending trends were mixed across Canada. Alberta and Saskatchewan each reported 1.24 per cent increases in total spending, while Quebec had a more modest rise of 0.23 per cent. Manitoba recorded the largest decline at 2.14 per cent, followed by British Columbia at 0.86 per cent and Ontario at 0.57 per cent.

Article content

Moneris’s monthly data shows a gradual improvement through the quarter. Domestic spending declined 2.35 per cent in January, improved to a 0.63 per cent decline in February, and turned positive in March with a 0.73 per cent increase.

Article content

Despite shifts in category spending, Moneris says the broader picture is one of adjustment rather than withdrawal.

Article content

“Businesses can adjust to a more cautious, pragmatic consumer by focusing on meaningful customer experiences that prioritize value and quality and reduce friction as much as possible,” said Sean McCormick, vice-president of business development, data services at Moneris.

Article content