Official data tells a story of cooling inflation and strong wage growth, but consumers aren’t buying it. TransUnion’s latest Consumer Pulse survey finds most Canadians say they did better than expected in Q4 2025, but the mood is turning fast. Near-term optimism is sliding, while more households see their finances eroding this year. The credit bureau warns inflation concerns remain prevalent, and more consumers are turning to credit cards to make ends meet.
Canadians Are Less Optimistic About Finances, More Expect Erosion
Canadians say they’re doing fine, but they’re still bracing for the worst. Nearly two-thirds of households felt their finances performed as expected or better in Q4 2025. At the same time, just 40% were optimistic about their finances over the next 12 months, down 3 points from the prior quarter. That’s tied for the lowest reading in the past five years, last seen when the trade war kicked off in Q2 2025, and again in 2022 when rates began to climb.
Source: TransUnion.
Pessimism is also on the rise. Nearly a third of consumers (31%) now feel negative about their financial outlook, a sharp 3-point jump for a single quarter. The level is tied with similar shocks that impacted optimism, but this time is different for one reason: there’s no obvious shock to fear.
Canada’s Biggest Financial Threats: Inflation, Housing, & Recession
The biggest concern driving this confidence erosion remains inflation, with 84% of consumers citing it as one of their top 3 concerns over the next six months. In a distant second is housing (54%), specifically rising rents or mortgage rates. It was followed by recession, which 51% of consumers fear by this summer.
Source: TransUnion.
There were some fading concerns, including jobs (29%) and the stock market (20%). Though the reason for fading may be simply that recession includes both of those things.
Credit Cards To Make Ends Meet, 25% Can’t Pay At Least One Bill
Canadians are solving their cost-of-living crisis the same way the government “solved” housing affordability—with debt. TransUnion specifically notes the “continued trend of Canadians turning to credit cards to aid in their cash flow.” In plain English, borrowers are using their credit cards to close the gap between their wages and the cost of living growth. That’s somewhat contradictory to the narrative of elevated wage growth and stable inflation, which policymakers have suggested is the norm in recent months.
TransUnion also found that a quarter of Canadians reported not being able to pay at least one bill or loan in full, while 63% cited unsecured credit, such as credit cards or personal loans, as the hardest to cover. It was followed by student loans at 55%, and mortgages at 45% of respondents.
Despite credit woes, Canadians plan to lever up from here. The survey found 1-in-5 (21%) plan to apply for new credit or refinances within the next year. At the same time, 47% intend to apply for a new credit card, while 23% plan to request a higher credit limit on an existing card.
Canadian households are doing better than they thought they would be, but a large share are seeing a bleak future ahead. Most consumers still have fears over inflation, housing, and recession. At the same time, a quarter can’t pay their bills—and even more are seeking credit to close the gap between rising expenses and income.
How many people are using credit to pay other credit? That’s a data point I’d really like to know now, especially with all of these “6 months low interest transfer promos” that suddenly appeared.
Always going to be a few clowns scared of the economy. They don’t realize a bad economy doesn’t have to be bad for everyone.
That is true. However, it also shouldn’t be up to carney and co to lie about what’s going on. The simple fact is he’s been a fail as pm. No value from his experience with trump, his i aptitude as a central banker seems to be inspiring the current clown show at the boc, and being in bed with various cartels is bad for almost everyone.
We need another govt that isn’t about gimmicks and tv ads, but about prudent fiscal management. We don’t need a civil servant who claims to be a banker, but an accountant to fix this mess. Start by getting rid of the hundred thousand civil servants hired by carney and Trudeau, stop pretending the liberals can invest in anything that doesn’t end up a scam of tax dollars.
Surprised they didn’t ask about the AI apocalypse. All of those “growth startups” were dead in a single swoop, and even “dumb” military tech is now toast.
re: the military part. doesn’t really matter when the gov is talking about buying old tech because it “makes more jobs.”
I’ve always been a ‘roll with the punches’ kind of person, and I don’t think things are harder today than they were when I was working. We just have to be smart about our money.
One thing reassuring here? No one believes the official inflation data. HAHAHA
Are there ever any positive articles? I mean the name is BETTER dwelling
News is funny, because when it’s distinctly unbiased the interpreter will project the environment on the outlet.
They flat out mention consumers are doing better than they expected, suggesting sentiment is the problem. I know Boomers think saying “everything is fine!” For a decade makes things fine, but that’s how we got into this mess.
Sounds like Canada has become a country full of broke losers.
So what is their problem?
Using credit cards like bank cards?
Pay cash.