BMO survey shows recession and inflation fears climb as Canadians reassess financial outlook
Concern about a looming recession climbed sharply in April as 74 percent of Canadians said they were worried about a potential downturn, up from 60 percent in March, according to the BMO Real Financial Progress Index special report.
The report, which tracked shifts in sentiment from March to April 2025, also found that 76 percent of Canadians expressed growing concern about inflation—an increase of 16 points from 60 percent the month prior.
Cost of living pressures followed a similar trend, with 78 percent reporting it as a concern in April compared to 61 percent in March.
BMO’s Sal Guatieri stated that “Canadian consumer confidence recently plummeted to the lowest depths in at least six decades on fear that the trade war will cost people their jobs and undermine their financial security.”
However, Guatieri said sentiment improved modestly in April following signs of a partial de-escalation in the trade war.
According to Guatieri, the recent rebound in equity markets may support stronger confidence in May.
While expressing concern about the broader economic impact of US tariffs, he noted that the inflation outlook remains relatively stable.
“CPI inflation will likely hold close to the Bank of Canada's 2 percent target this year, paving the way for some further reductions in policy rates,” he added.
The BMO survey also reported that 58 percent of Canadians expressed concern about their personal financial situation, compared to 42 percent in March.
Nearly one quarter—24 percent—said they were increasingly worried about the prospect of job loss.
Concerns over the impact of US tariffs rose from 65 percent to 74 percent in the same period.
Boomers appeared most affected by inflation and geopolitical factors, as per the April survey.
BMO found that 84 percent of Boomers were concerned about cost of living, followed by 83 percent about tariffs, 82 percent about recession, and 80 percent about inflation.
Younger Canadians, specifically Gen Z, showed heightened anxiety around job security, with 37 percent reporting concern about losing employment.
Brent Joyce, chief investment strategist at BMO Private Investment Council, addressed the investment climate, stating, “While navigating markets has been difficult amid the recent uncertainty, we remain committed to well-balanced and well-diversified portfolios.”
Joyce encouraged a long-term view, suggesting that uncertain times are appropriate for reassessing risk tolerance. He added that guidance from a trusted advisor can help determine the right course of action.
Anthony (Tony) Tintinalli, head of Specialized Sales at BMO, acknowledged the shift in sentiment, saying, “Many Canadians and their families are understandably more concerned about their finances and are taking proactive steps to protect their financial future.”
Tintinalli said BMO teams are prepared to assist Canadians in building and adjusting financial plans as new goals emerge or circumstances change.
BMO encourages Canadians to take early steps in financial planning, remain disciplined with budgeting and contributions, and consider building emergency funds equal to three to six months of living expenses.
Diversification, stress testing financial plans, and avoiding panic selling during periods of volatility are also recommended.
BMO said working with a financial professional can help develop and maintain a plan that aligns with income, risk appetite, and goals, especially when adjusting for life changes or shifting market dynamics.
