Canadians' Financial Outlook Divided as Inflation and Recession Fears Appear to Shape Behaviours – TransUnion Canada Study

• Younger Canadians plan to take on more credit (47% of Gen Zs and 31% of Millennials) as they struggle more than other generations to pay their bills.
  
  
• 84% of surveyed Canadians said inflation for everyday goods is in their top three financial concerns; among all surveyed, 53% feel their household income is not keeping pace with inflation.
  
  
• 85% said they changed shopping habits in the past three months in response to the current economic environment; among all surveyed, 67% sought out sales and discounts more frequently during that timeframe.
  
  
• 18% do not believe they would be approved for a new credit or lending product.
  
  

TORONTO, Jan. 13, 2026 (GLOBE NEWSWIRE) -- Canadians' optimism about their finances waned as the cost of living continues to rise. Over half (53%) said their household income isn't keeping pace with inflation, according to TransUnion's (NYSE:TRU) Q4 2025 Canada Consumer Pulse Study. Nearly one-third (31%) are pessimistic about their household finances in the next 12 months, a three percentage point drop from Q3 2025. At the same time, 25% of Canadians reported they're unable to pay at least one of their current bills or loans in full. This strain persists despite 20% saying their income rose in the past three months, while 64% reported no change and 16% experienced a decline.

Among those who reported being unable to pay at least one of their currents bills and loans in full, nearly two thirds (63%) said that it was their credit card payments or personal loans that they would not be able to pay in full, followed by student loans (55%) and then mortgages (45%). These findings underscore the growing strain on affordability and the difficult financial choices many Canadians face.

"Affordability continues to be a concern for many Canadians as economic uncertainty impacts financial decision making," said Matt Fabian, director of financial services research and consulting at TransUnion Canada. "While many are taking proactive steps to be financially resilient, there are significant sections of the population who continue to struggle with staying on top of debt payments while navigating rising costs."

Canadians Brace for A Recession

More than one in four (27%) Canadians believe the country is currently in a recession, while another 32% expect one within the next 12 months. A vast majority who said we're either currently in a recession or will be in one in the next 12 months (84%) reported preparing for a possible recession. The most common stated actions include:

• Reducing spending (61%)
• Building up savings (38%)
• Paying down debt (28%)
• Ensuring credit report is accurate (9%)
• Changing jobs (8%)
• Requesting credit limit increases (7%)
• Taking on new credit (5%)
  
  

Canadians Adjust Spending Habits to Help Weather Economic Instability

Economic uncertainty could be leading many Canadians to adjust their spending habits to stay on budget. Of those surveyed, over two thirds (67%) said they looked for sales and discounts more frequently in the past three months due to the current economic environment. Other adjustments made include:

• Shopping more frequently at more affordable retailers (44%)
• Buying more generic or store brands (41%)
• Using more coupons (31%)
• Taking advantage of credit card offers for special discounts more often (18%)

Canadians Report Cutting Discretionary Spending and Plan to Put Less Towards Retirement Funds

Only 15% of those surveyed said they have not changed their shopping habits in the past three months due to the current economic environment. Among all surveyed, more than half (51%) said they cut back on discretionary spending like dining out, travel and entertainment in the last three months, while nearly one in five (19%) expect to decrease their contributions to retirement funds or investments in the next three months, indicating a shift toward prioritizing essential goods. This comes as over half (53%) of surveyed Canadians reported concerns with not setting aside enough money for retirement in the next three to five years.

Canadians See Credit as Key to Financial Goals – But Access Falls Short for Many

With cost-of-living top of mind, a vast majority of surveyed Canadians (82%) said that access to credit and lending products is important to achieving their financial goals. However, only 56% believe they have sufficient access, underscoring the need to close the gap faced by the underserved credit population.

One in Five Canadians Plan to Take on More Credit

Just over 1 in 5 Canadians (21%) plan to apply for new credit or refinance existing credit within the next year, with younger consumers leading the way. Nearly half of Gen Z (47%) and 31% of Millennials reported intentions to obtain new or refinance credit.

Additional TransUnion data outside of this survey shows Millennials now account for 38% of Canada's total outstanding debt – approximately $988 billion. Overall, among those planning to apply for new credit or refinance existing credit in the next year, nearly half (47%) plan to apply for a new credit card and 23% say they'll increase limits on existing credit cards. Other anticipated actions include applying for a buy now, pay later loan, applying for a new car loan or lease, or refinancing a mortgage or (all 20%).

"We're seeing a continued trend of Canadians turning to credit cards to aid in their cashflow," said Fabian. "As inflation places additional strain on Canadians' wallets, many consumers may be looking for increased liquidity to help balance their budgets and may see credit as a useful tool to help them do so."

Nearly One in Five Canadians Don't Think They Would Get Approved for New Credit

Nearly one in five (18%) of Canadians surveyed do not believe they would be approved for a new credit or lending product if they needed one, despite most viewing credit access as essential for achieving financial goals.

Moreover, just over 20% of Canadians who intended to apply for new or refinance existing credit ultimately chose not to. Of this group, nearly a quarter (24%) cited concerns about rejection due to their credit history, while 26% stated they believed it would be rejected due to their income or employment status.

Young Consumers Report Being Targeted by Fraud the Most as Tactics Evolve

Newer technologies like AI have enabled fraudsters to deploy new scams and impersonation tactics. Nearly half (46%) of Canadians surveyed reported being targeted by email, online, phone call or text message fraud in the past three months.

Of those that report being targeted, 7% said they fell victim to the fraud attempt, up one percentage point year-over-year. Younger Canadians appear to be the most vulnerable, with 54% of Gen Z indicating they had been targeted—the highest among surveyed generations. As a digital-first generation, Gen Z is likely more exposed to online fraud than other generations.

Among all surveyed, the most common tactics reported by those who said they were targeted in the last three months were:

• Phishing (fraudulent emails, websites, social posts, QR codes, etc. meant to steal data) – 43%
• Smishing (fraudulent text messages meant to trick a person into revealing personal data) – 41%
• Vishing (fraudulent phone calls meant to trick a person into revealing personal data) – 41%
  
  

Despite these risks, over a third of Canadians (36%) said they took no action to address cybersecurity concerns in the past 60 days. Of those, nearly half (48%) said they did nothing because they didn't know what steps to take, underscoring the need for continued education to help protect Canadians against fraud.

About TransUnion (NYSE:TRU)

TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries, including Canada, where we're the credit bureau of choice for the financial services ecosystem and most of Canada's largest banks. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this by providing an actionable view of consumers, stewarded with care.

Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world.

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