Canadian families are doing some serious recalculating this holiday season. According to BMO Financial Group, tariffs and inflation are turning what should be a festive time into a budgeting challenge that's forcing households to rethink nearly every purchase.

A new survey from the bank reveals that economic pressures are reshaping how Canadians approach year-end spending, with more than three in five people adjusting their plans because they expect tariffs to push prices even higher.

The Numbers Behind the Squeeze

BMO's latest Real Financial Progress Index paints a picture of consumers caught between wanting to celebrate and needing to stay solvent. The survey found that 61% of Canadians are changing their shopping behavior this year, and the strategies they're adopting tell you everything about the pressure they're feeling.

Some are hunting for products less affected by tariffs. Others are deliberately choosing Canadian-made goods to sidestep import costs altogether. And plenty are front-loading their purchases, trying to lock in prices before another wave of increases hits.

The average Canadian household expects to spend $2,310 this season across all categories—travel, groceries, entertainment, clothing, electronics, toys, and traditional gifts. That's not pocket change, especially when you factor in rising food costs, climbing unemployment numbers, and inflation that refuses to stay quiet.

Where the Cuts Are Happening

When budgets get tight, something has to give. Many shoppers are slashing spending on decorations, travel plans, and restaurant meals. Meanwhile, 25% expect to spend more on groceries than they did last year—because everyone still needs to eat, and those costs keep climbing whether you like it or not.

The coping mechanisms are familiar: hunting for discounts, buying cheaper gifts, spreading purchases across multiple weeks to smooth out the cash flow crunch.

The Stress Factor

Half of survey respondents admit that holiday spending stresses them out. More than a third feel pressure to keep up with what others are spending, and many are raiding their long-term savings to cover seasonal purchases. Younger Canadians are especially likely to pick up extra work just to handle the holiday bills.

The Payback Timeline

Here's where it gets uncomfortable: Canadians expect to need more than two months to pay off their holiday spending, and some aren't sure when they'll clear those balances at all. To manage the damage, many are planning to trim their gift lists or cut back on birthday and other occasion spending in the months ahead.

Silver Lining: Better Budget Discipline

If there's an upside, it's that economic pressure is forcing better habits. About 68% of respondents say they're working harder to stick to a budget this year. Some saved throughout the year in anticipation. Others are leaning heavily on sales and discount retailers.

Many Canadians are also turning to digital tools to track spending, manage credit, and start planning for next year's purchases—because apparently, the best time to think about next December is while you're still paying for this one.