Survey shows income strain and missed tax breaks threaten household balance sheets
Nearly eight in ten working Canadians say their income is not keeping pace with the cost of living, according to a new survey commissioned by H&R Block Canada, and many are looking to 2026 as a year of financial strain rather than growth.
As per the survey, 72 percent of Canadians plan to reduce their spending in 2026 due to pricing pressures, and 54 percent worry the year will be financially challenging.
Among those who are saving, 77 percent say they will put less into savings because of higher costs.
Despite that, Canadians remain split on how they feel today: 53 percent say they feel good about their current financial situation, while 46 percent are not feeling positive.
H&R Block Canada reports that 62 percent of working Canadians say they live comfortably at their income level, but nearly 4-in-10 (38 percent) say they do not.
Cash flow is tight even for those who describe their pay as “decent.”
According to the survey, 58 percent of Canadians that earn an income say that despite having a decent salary, it is hard to make ends meet for everyday expenses such as groceries, gas and household essentials.
Nearly half of working Canadians (46 percent) say their paycheque only covers day-to-day living costs with no money left over, and 35 percent say they cannot stretch their paycheque to their next pay day, often resorting to credit cards, overdrafts or bridging loans.
Regionally, concern about making ends meet is highest in Atlantic Canada at 67 percent, followed by Alberta (66 percent), Saskatchewan/Manitoba (64 percent), Ontario (59 percent), British Columbia (53 percent) and Quebec (51 percent), according to H&R Block Canada.
Overall, 55 percent of Canadians report that they are currently saving or putting aside money each month, while 41 percent say they are not able to.
Despite recent interest rate reductions, 46 percent of Canadians with debts say they are concerned about their ability to pay off credit cards, loans and mortgage repayments.
In this environment, tax planning emerges as one of the few levers households can still pull.
According to H&R Block Canada, 65 percent of Canadians say they expect a refund this tax season, though many report having no idea whether they will actually receive one.
Canadians are divided on their understanding of tax-related credits and deductions: 59 percent say they have a good understanding of the credits and benefits available to maximize their return, while 41 percent are not confident.
Many Canadians feel the high cost of living is outpacing their income, said H&R Block Canada tax expert Yannick Lemay.
He said “around two-thirds of Canadians expect a refund this tax season” and that the firm’s Free Second Look program “on average” uncovers “about $2,725 of missed money” for roughly 60 percent of clients whose previous returns it reviews.
Non-filers stand out as a clear risk group.
According to H&R Block Canada, 7 percent of Canadians say they do not plan to file their taxes, representing more than 2 million adults who could miss out on year-round tax credits and benefits.
A separate study commissioned by H&R Block Canada in 2025 found that 65 percent of Canadians were not aware they can amend tax returns from the last 10 years to claim benefits, deductions or credits they were entitled to but missed.
When they learn they can amend prior returns, 38 percent of Canadians believe there are amounts they could still claim, and more than a third (34 percent) say they are inclined to review prior returns in case they missed any tax benefits, credits or deductions they were legible for.
Lemay said thousands of Canadians overlook ways to boost their tax refund and keep more cash in their pockets.
He said even people with little or no income need to file a return to unlock many year-round tax credits and benefits, warning that otherwise they risk missing out on “hundreds and even thousands of dollars.”
