Canadian Survey of Consumer Expectations—Third Quarter of 2026

Results of the third‑quarter 2026 survey | Vol. 7.3 | October 19, 2026

The Canadian Survey of Consumer Expectations was conducted through an online panel from August 5 to 27, 2026. About three‑quarters of responses were collected before trade talks between Canada and the United States broke down on August 21, and the subsequent announcement of new Canadian counter‑tariffs. Follow‑up phone interviews took place from August 24 to September 4, 2026.

Overview

• In the third quarter of 2026, consumers’ long-term inflation expectations rose to match elevated shorter-term expectations. Consumers continued to cite trade tensions and energy prices as key sources of inflation. Expectations at all horizons moved higher after trade talks between Canada and the United States broke down.
• Consumers reported better financial health than in the previous quarter. Gains in the value of financial assets and greater confidence in the labour market were cited as reasons for the improved expectations of future financial health.
• Workers’ perceptions of the labour market improved slightly but remain below the survey average. Compared with the previous quarter, labour market perceptions rose among workers who are more exposed to trade with the United States but deteriorated among workers in sectors where artificial intelligence poses a higher risk of task replacement.
• Despite improvements in financial health and labour market perceptions, spending plans deteriorated from already weak levels. High prices and economic uncertainty continue to weigh on consumers.

Inflation expectations remain elevated amid concerns about trade tensions and energy prices

Consumers’ perceptions of current inflation and expectations for inflation over the next 12 months and 24 months were little changed (Chart 1). Near‑term expectations remain above both their historical average and levels seen before trade tensions began. At the same time, long‑term inflation expectations moved higher this quarter, bringing them in line with already elevated short‑term expectations.

Consumers continued to cite tariffs and trade tensions as the top factor affecting inflation (Chart 2). Respondents were somewhat more likely to cite tariffs and trade tensions after trade talks between Canada and the United States broke down. In follow-up interviews, many consumers described how tariffs were raising prices of everyday purchases.

Energy prices were also still widely cited as a source of inflation, although fewer respondents mentioned them than in the previous quarter. Most consumers believe the war in the Middle East will raise inflation over the next 12 months. In follow‑up interviews, several respondents linked the conflict to concerns about higher gasoline prices and their effects on other goods and services. As one respondent stated, “I think anything that happens [in the Middle East] will affect economies worldwide and trickle all the way down to the local economy where I live…mainly [through] oil prices. And when you’re affecting oil prices, that, again, trickles to groceries because, obviously, you need oil to move groceries around.”

The breakdown in trade talks between Canada and the United States happened while the survey was being conducted, allowing for a comparison of responses collected before and after the event. Consumers who responded to the survey after Canada‑US trade talks broke down reported slightly higher inflation expectations at all horizons (Chart 3). In follow‑up interviews, one respondent said the collapse in negotiations increased the likelihood of additional tariffs and higher prices. “There’s been a lot more news about more tariffs coming in, taxed at very high percentage rates,” the respondent said, adding later, “The discussions that have been happening between Canada and the US have not been successful, [and] in the near future, I think there's going to be a lot more tariffs on Canadian products.”

Consumers are feeling better about their financial health

The Canadian Survey of Consumer Expectations (CSCE) indicator edged higher in the third quarter (Chart 4).1 Better perceptions of financial health accounted for most of the increase, while views of the labour market rose modestly. These gains were partly offset by weaker spending intentions. Even so, the CSCE indicator remains low and only slightly above levels observed when trade tensions with the United States began. About half of consumers continue to expect the Canadian economy to fall into a recession over the next 12 months, particularly those who responded to the survey after trade talks collapsed.

Consumers reported feeling better about their financial health in the third quarter, perceiving a lower risk of missing a debt payment and easier access to credit. Confidence about their finances over the next 12 months also improved.2 Compared with the previous quarter, consumers expecting their financial situation to improve over the next 12 months more often attributed that optimism to higher financial asset values and greater confidence in the labour market (Chart 5). In follow-up interviews, one respondent linked their improved financial situation to their current job, saying, “I make more money now…. I get regular raises here.”

Consumers’ labour market perceptions moved closer to average

The CSCE labour market index edged up in the third quarter, recovering further from the decline observed at the onset of trade tensions, but remains below its survey average (Chart 6). Consumers reported a somewhat higher likelihood of voluntarily leaving a job and slightly greater confidence in finding a new one than in the previous quarter. However, concerns about job loss also increased, though modestly.

The labour market index increased among workers employed in sectors more reliant on trade with the United States, although most responses were collected before trade talks broke down (Chart 7). Part of the improvement may reflect conditions among natural resource firms, where elevated commodity prices and expansions in production and transportation capacity are supporting export sales, particularly in oil and gas.3 Even so, job‑loss concerns among these workers remain elevated because of uncertainty around US trade policy. In follow‑up interviews conducted after trade talks collapsed, one respondent stated, “There’s a lot of uncertainty with the tariffs. Some companies, if [they are hit with] 50% tariffs, it really affects them; obviously, there’s going to be some layoffs.”

Job security concerns remained prevalent among workers in sectors where tasks are more replaceable by artificial intelligence (AI). These workers also perceived a lower likelihood of finding another job, contributing to weaker overall labour market perceptions for this group (Chart 8). At the same time, workers across all sectors who use AI generally say it improves their productivity on the job (Box 1).

Economic uncertainty, linked largely to trade tensions with the United States, continues to weigh heavily on consumers. Nearly half believe that the most serious effects on inflation or the economy are still ahead, and these consumers are more likely than others to hold off on major purchases (Chart 10). Respondents who completed the survey after Canada‑US trade talks broke down were more likely to believe that the worst effects of trade tensions are still ahead.

Endnotes

The Canadian Survey of Consumer Expectations gathers respondents’ views on inflation, the labour market and household finances. Additional information on the survey and its content is available on the Bank of Canada website. The survey report summarizes opinions expressed by the respondents and does not necessarily reflect the views of the Bank of Canada.