Canadian pride drives an increase in the Index of Consumer Spending during the second quarter of 2025

In partnership with the Conference Board of Canada, we are pleased to present the following authoritative insights from their Index of Consumer Spending (ICS) which has been Powered by Moneris® Data Services. Our industry-leading consumer spending data and insights from point-of-sale activity combined with The Conference Board of Canada’s expertise provides a coast-to-coast-to-coast perspective on how the economy is trending.

Canadian Pride at Checkout: The ICS Rises with Demand for Domestic Goods

• The Index of Consumer Spending (ICS) averaged 120.7 points in the second quarter of 2025, reflecting a 2.4-point increase year-over-year.

• Throughout the quarter, Canadian retaliatory tariffs on a range of U.S. goods, varying from food to furniture, have added upward inflationary pressure to Canada’s economy. This has driven an increase in consumers' total nominal spending as they continue to seek cheaper and/or locally produced substitutes.

• In April, the ICS score surged to 117.1 points, marking a 12.3-point improvement from the previous month. This increase was largely driven by a rise in food prices, which escalated from 3.2 per cent growth in March to 3.8 per cent in April, contributing to the boost in the ICS score. Higher Easter-related spending was another factor behind April’s uptick. A Retail Council of Canada survey showed that more than 80 per cent of shoppers planned to match or exceed their Easter spending from the previous year.¹

• In May, the ICS climbed further to 121.3 points, in line with typical seasonal trends. The warmer months generally witness higher travel activity, increased retail spending, and greater demand in food services and accommodations, all of which drive up consumer expenditures.

• The ICS continued its upward trend in June, ending the quarter at 123.6 points. The Canadian economy added 83,000 jobs in June, lowering the unemployment rate to 6.9 per cent, which likely boosted household spending. Furthermore, an increase in the Consumer Price Index (CPI) contributed to a higher nominal total of consumer spending. The CPI’s rise in June was driven by inflation in durable goods (up by 2.7 per cent) and clothing (up by 2.0 per cent), though slower growth in grocery prices (up by 2.8 per cent) helped moderate some of the upward pressure on households’ purchasing power.

Key Insights

Consumers want Canadian.

Consumers are increasingly favouring Canadian-made products in response to the actions and statements of the new U.S. administration. According to the Bank of Canada’s Canadian Survey of Consumer Expectations (CSCE) for the second quarter of 2025, there is a growing preference for domestically produced goods and most respondents indicated a willingness to pay up to a 10 per cent premium for Canadian-made products.² This growing preference for Canadian-made products provides some upside to consumer spending at a time when it is being throttled by low consumer confidence and ongoing uncertainty. Additionally, due to rhetoric from the new U.S. administration, Canadian travelers' intentions to visit the U.S. have declined. The Conference Board of Canada's Travel Markets Outlook underscores this change, highlighting a significant decrease in the number of Canadians returning from the U.S. in April, with car trips down by 35.2 per cent and air travel by 19.9 per cent. Despite a drop in U.S. visitors, early indicators point to stronger domestic travel activity, resulting in a net tourism gain and increased travel spending within Canada this quarter.

Consumer sentiment is shifting from spending to saving.

The ongoing Canada–U.S. trade tensions have heightened economic uncertainty, leading to a decline in Canadian consumer confidence. This quarter, consumer confidence averaged 52.9 points, down from 62.2 points in the same quarter last year. This decrease reflects diminished sentiment in personal finances, job availability over the next six months, and the economic climate for making major purchase decisions. With lower confidence, spending patterns are shifting from discretionary to essential goods, as highlighted in the Bank of Canada’s second quarter CSCE. Respondents indicated a clear intention to reduce spending on non-essential items and prioritize necessities. While this shift puts downward pressure on the growth potential of the ICS, tariff-driven inflationary pressures are helping to stabilize nominal spending levels. Looking ahead, a greater move toward saving could emerge as companies using FIFO (First In, First Out) accounting adjust to higher prices as they deplete their stock of less expensive, pre-tariff inventory.

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¹Retail Council of Canada, “Easter Spending 2025 | National Consumer Research,” March 26, 2025.

²Bank of Canada, “Canadian Survey of Consumer Expectations—Second Quarter of 2025,” July 21, 2025.

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Walter Bolduc

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Conference Board of Canada