⁠72% of Canadians Are Looking for Alternatives to U.S.-Made Goods as Holiday Spending Drops 11%

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Canadians are heading into the holiday season with two priorities that do not always fit neatly together: spending less and buying closer to home. PwC Canada’s 2026 holiday outlook found consumers expect to spend an average of $1,487 on gifts, travel and entertainment, down 11% from last year. At the same time, 72% say they are actively looking for alternatives to U.S.-made products.

That combination captures a bigger shift in Canadian shopping habits. Price remains critical, but where a product comes from now carries greater weight. More than half of consumers say they would pay extra for a Canadian-made alternative, even as household budgets remain under pressure. The result could be a holiday season defined less by sheer spending and more by increasingly deliberate choices about price, origin and value.

Holiday Budgets Are Getting Smaller, but Shopping Is Not Stopping

The projected 11% decline takes average planned holiday spending to $1,487, covering gifts, entertainment and travel. Travel is expected to take the sharpest hit, with planned spending falling 14%. Rather than cancelling the holidays altogether, many Canadians appear to be adjusting how they celebrate. PwC found 75% are taking steps to stretch their budgets, while 69% expect to purchase less expensive alternatives. Discount hunting, smaller purchases and decisions about which expenses still matter are becoming central to the season.

Those intentions fit a broader picture of cautious Canadian consumption. Statistics Canada reported retail sales fell 0.7% in July, with eight of nine retail subsectors declining, while sales volumes fell 1.1%. August inflation was running at 3.0% year over year. The Bank of Canada has also found that high prices and economic uncertainty continue to hold back household spending intentions. Holiday restraint, in other words, is emerging against an already cautious consumer backdrop rather than appearing in isolation.

Buying Canadian Is Becoming More Important Even as Wallets Tighten

One of the most striking findings is that Canadian origin appears to be gaining value precisely when shoppers have less room in their budgets. PwC found 54% of consumers would choose a more expensive Canadian-made product over an imported product with a similar look, feel and quality. That is up from 49% last year. Baby boomers show particularly strong support, with 66% saying they would pay more for the Canadian option despite being among the generations planning the largest overall spending cuts.

That does not mean Canadian origin automatically wins every purchase. Separate PwC research on food shopping illustrates the tension clearly. Although 75% of Canadians said they would pay a premium for locally produced food, 62% selected the cheaper imported option when directly presented with a choice between a lower-priced import and a more expensive domestic equivalent. Canadian-made status can therefore influence consideration, but the final decision still depends heavily on how large the price difference becomes.

The Shift Away From U.S. Products Has Lasted Far Beyond the Initial Trade Shock

The 72% figure is not appearing in isolation. Separate polling indicates that attempts to avoid American goods have remained unusually persistent since Canada-U.S. trade tensions intensified. Abacus Data found in September that 77% of Canadians intended either to avoid American products entirely or buy as few as possible. That was almost unchanged from the 78% recorded in February 2025, when the tariff dispute was still in its early stages.

Reported behaviour has also moved in the same direction. Abacus found the proportion saying they had bought more Canadian products increased from 53% in February 2025 to 61% in September 2026, while the share saying they had tried to avoid American goods rose from 38% to 51%. Research Co., using a differently worded question, found 58% were avoiding U.S.-origin goods when a non-American alternative was available. The percentages are not directly interchangeable, but together they suggest the shift has become more durable than a short-lived reaction.

Older Canadians Are Driving Much of the Holiday Spending Pullback

The national 11% decline masks a significant generational divide. Gen X respondents expect to spend 21% less than last year, while baby boomers plan an 18% reduction. Millennials anticipate a 6% decline. Gen Z moves in the opposite direction, with planned spending up 8%, although PwC describes that increase as more of a stabilization after previous weakness than the beginning of a major spending boom.

Family circumstances matter as well. People living in households with children expect to spend nearly twice as much as those without children, and they are more likely to prioritize experiences and hands-on, screen-free gifts. Geography produces another divide. British Columbians expect the highest average spending at $1,639, followed by Ontario at $1,567 and Quebec at $1,497. Atlantic Canada averages $1,349, while Alberta, Manitoba and Saskatchewan together average $1,261. Quebec is notable because its planned spending is essentially unchanged from last year while every other reported region is pulling back.

Cross-Border Shopping Is Becoming a Much Smaller Part of the Holiday Season

Canada-first sentiment is showing up beyond individual product choices. Only about 13% of respondents expect to shop across the border this holiday season, compared with 20% in 2024. For retailers in Canadian border communities and large urban centres alike, that potentially leaves more holiday dollars competing for products, promotions and experiences at home rather than flowing to U.S. malls and outlets.

The timing of the PwC research adds another layer. Respondents were surveyed in late July and early August, before Canada’s latest tariff escalation with the United States. Beginning September 8, Canada imposed counter-tariffs of 15%, 25% and 50% on selected U.S.-origin products covering $27.6 billion in imports, with affected sectors including dairy, appliances, electronics, steel and agricultural equipment. PwC cautions that because its survey occurred before those developments, the recorded Buy Canadian sentiment may actually understate attitudes entering the holiday season. At the same time, tariffs can raise costs, complicating the effort to keep household spending down.

Patriotism Has a Price Limit

Supporting Canadian businesses may be popular, but affordability remains a hard constraint. PwC found 69% of holiday shoppers expect to choose less expensive alternatives this season. Abacus Data separately reported that 61% of Canadians believe products made in Canada generally cost more than comparable American products. That perception creates an obvious challenge: consumers may want to shift their spending while still being unable or unwilling to absorb a large price premium.

Bank of Canada research has shown where that limit can emerge. In its late-2025 consumer research, three-quarters of respondents said they were unwilling to pay more than an additional 10% for Canadian-made products. That helps explain why strong Buy Canadian sentiment can coexist with aggressive deal hunting. A Canadian product priced close to its imported rival may gain a meaningful advantage from its origin. A much more expensive product has a harder task. For households dealing with groceries, housing, transportation and other recurring bills, national preference does not eliminate the arithmetic at the checkout.

Canadians Are Combining Stores, Promotions and AI to Find Better Value

The hunt for savings is becoming more strategic. Younger consumers expect to concentrate more shopping around Black Friday: 38% of Gen Z and 33% of millennials plan to shop during that promotional weekend. Baby boomers are behaving differently, with 43% planning to delay more of their spending into December. That gives retailers two important windows rather than one, with aggressive promotion likely to matter throughout the season rather than only during a single weekend.

Technology is entering the process as well. PwC found 28% of Canadian consumers plan to use artificial intelligence somewhere in their holiday shopping journey, up from 17% last year. Research and comparison are more common uses than actually completing a purchase. Yet physical stores remain important: 40% expect to combine online and in-store purchasing, while 74% are prioritizing offline and in-person activities during the holidays. The emerging Canadian shopper is therefore not simply moving online. Instead, consumers are combining digital research, promotions and traditional stores to make each dollar work harder.

Retailers Have to Make “Canadian” Clear, Credible and Affordable

The shift creates an opportunity for Canadian brands, but simply putting a maple leaf on packaging is not enough. Federal guidance distinguishes clearly between origin claims. For non-food goods, the Competition Bureau generally considers a “Product of Canada” claim appropriate when at least 98% of direct production or manufacturing costs are Canadian and the last substantial transformation occurred in Canada. “Made in Canada” generally requires at least 51% Canadian direct production costs, substantial transformation in Canada and an appropriate qualifier about imported content.

That distinction matters when consumers are actively searching for domestic alternatives. Transparency can become a competitive advantage, particularly when shoppers may not immediately know which companies, products or supply chains are genuinely Canadian. The survey itself also deserves careful interpretation: PwC questioned 1,016 people online between July 30 and August 6, and the findings measure planned behaviour rather than completed holiday transactions. Online non-probability surveys cannot be assigned a conventional margin of error. Still, paired with other recent consumer research, the findings point toward a clear theme for 2026: Canadians want value, but an increasing number also want to know where their money is going.

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