Two-Thirds of Canadians Say Big Spending Cuts Are Coming

As 2026 begins, Canadians are signaling a dramatic shift in their financial approach, with a significant majority preparing to tighten their belts in response to economic pressures.

According to a new TD survey, 67% of Canadians plan to cut back their spending this year—a notable jump from 51% in 2025, suggesting growing financial anxiety across the country.

The scale of these anticipated cuts is substantial. Nearly six in 10 Canadians surveyed say they’ll reduce their monthly budgets by up to $1,000, a reduction that reflects serious concerns about affordability and the rising cost of living.

This trend spans generations, though younger Canadians appear to be feeling the squeeze most intensely.

A Generational Divide in Financial Pressure

The survey reveals a striking generational gap in who’s planning to pull back on spending.

An overwhelming 86% of Gen Z and 77% of Millennials are preparing to slash their budgets, compared to 65% of Gen X and just 43% of Boomers.

This disparity suggests younger Canadians face unique financial headwinds—whether from student debt, higher housing costs relative to income, or less established savings cushions.

Where Canadians Are Cutting Back

When it comes to making sacrifices, Canadians are targeting discretionary spending across multiple categories.

More than half plan to eat out less often, while 53% intend to make fewer retail purchases.

Entertainment is also on the chopping block, with 44% planning to reduce spending on concerts, sporting events, and movies.

Beyond simply spending less, Canadians are becoming more strategic shoppers.

Forty-one percent say they’ll shop around more to save on purchases, while 39% plan to switch from name-brand to store-brand products.

Nearly one-third are canceling some or all of their subscriptions—a move that reflects both the cumulative burden of monthly fees and a willingness to reconsider what’s truly essential.

Creative Cost-Cutting and Income Boosting

Faced with financial pressure, Canadians aren’t just spending less, they’re getting creative about stretching their dollars.

Three in 10 are turning to couponing or participating in “no spend” challenges, where participants commit to avoiding non-essential purchases for a set period.

Another 27% are embracing thrifting as a way to acquire goods while keeping costs down.

Perhaps most telling is that one in four Canadians are taking on side hustles or part-time employment to help manage expenses.

This suggests that for many, cutting spending alone isn’t enough to make ends meet, prompting a shift toward earning additional income.

What This Means for the Canadian Economy

The widespread pullback in consumer spending revealed by this survey carries implications beyond individual households.

Consumer spending is a major driver of economic growth, and if two-thirds of Canadians follow through on their plans to cut back, retailers, restaurants, and entertainment venues could see significant impacts on their bottom lines.

At the same time, the trend toward store brands, secondhand shopping, and price comparison could accelerate changes already underway in the retail landscape, potentially benefiting discount retailers and value-oriented businesses while challenging premium brands.

As Canadians navigate 2026 with tighter budgets and greater financial caution, the data suggests a population increasingly focused on financial resilience—whether through strategic spending cuts, creative savings tactics, or finding new ways to boost their income. Whether these changes represent a temporary adjustment or a longer-term shift in Canadian consumer behavior remains to be seen.