Canadians delay major purchases and boost emergency funds as inflation and recession fears grow
Canadians have started to increase their emergency savings and postponing major spending decisions in response to economic instability and the US-Canada trade war, according to a recent survey by EQ Bank conducted in partnership with the Angus Reid Forum.
The survey, reported by BNN Bloomberg and the Financial Post, found that 53 percent of Canadians have increased or are considering increasing the size of their emergency fund over the past three months.
An additional 45 percent are putting off significant purchases or life events to prioritise saving.
Among those delaying purchases, 35 percent are deferring health-related expenses, such as dental care or physiotherapy.
Nearly half of respondents said a larger emergency fund helps reduce anxiety about the future, while 47 percent expressed concern about higher living costs and inflation driven by tariffs.
Another 40 percent cited recession fears linked to the trade war.
Dan Broten, senior vice-president and head of EQ Bank, said many Canadians now hold emergency savings and continue to grow them as a strategy to manage economic shocks.
He added that this is a “crucial moment” for households to assess whether their savings are earning interest, protected under CDIC, and accessible when needed.
Younger Canadians appear to be preparing more aggressively than older cohorts.
According to the EQ Bank survey cited by the Financial Post, 70 percent of generation Z (ages 18–28) have recently boosted or are planning to boost their savings.
In contrast, only 53 percent of generation X (ages 45–60) and 41 percent of baby boomers (ages 61–79) reported doing the same.
Statistics Canada’s household wealth data show this shift began in 2024.
Millennials — a cohort that includes generation Z — saw their net savings rise by nearly 60 percent year-over-year to $23,716 per household.
Generation X savings rose by 12.76 percent to $18,679 per household, while older Canadians continued to spend more than they earned.
Younger respondents cited anxiety about the future (67 percent) and job insecurity (37 percent) as top reasons for saving.
Nearly half reported delaying non-essential travel, and many postponed moving out of their parents’ homes or purchasing a vehicle.
Financial planner Cindy Marques said her clients — particularly younger ones — are avoiding new debt and increasing savings, reflecting lingering caution from the 2020 economic downturn.
Marques noted that while older Canadians have likely locked in their retirement savings strategies, millennials are delaying large milestones like home purchases or starting families to save more in the meantime.
She added that younger Canadians may find it easier to save because they face fewer financial commitments such as mortgages or child-rearing costs.
Economist Maria Solovieva of Toronto Dominion Bank said wage growth helped lift disposable incomes for younger households, which may explain the boost in savings.
However, TD expects wage growth to weaken by Q3 2025. She warned that Canadians are likely to scale back discretionary spending to manage their budgets and that precautionary savings will likely stay above pre-pandemic levels for some time.
A recent TD report noted that consumer spending growth slowed to 5.2 percent in February, down from 7.2 percent in December.
Solovieva linked this slowdown to declining consumer confidence due to the trade war. She said the Bank of Canada’s Q1 2025 expectations survey also reflects household concerns about job security and overall financial health.
According to her projections, spending could stagnate or decline further by the second half of 2025.
