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Canadians' Financial Outlook Divided as Inflation and Recession Fears Appear to Shape Behaviours – TransUnion Canada Study

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Younger Canadians plan to take on more credit (47% of Gen Zs and 31% of Millennials) as they struggl...

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AI Summary

53% of Canadians feel their income isn't keeping pace with inflation. 84% list inflation for everyday goods as a top financial concern. 31% of Canadians expect a recession within 12 months. 47% of Gen Z plan to take on more credit amid financial struggles. Young Canadians are increasingly targeted by fraud, with 54% affected.

Sentiment Rationale

Increasing demand for credit can lead to higher revenues for TRU, similar to past growth during credit expansions.

Trading Thesis

Immediate consumer behavior adjustments reflect short-term shifts in credit use amid economic pressures.

Market-Moving

  • 53% of Canadians feel their income isn't keeping pace with inflation.
  • 84% list inflation for everyday goods as a top financial concern.
  • 31% of Canadians expect a recession within 12 months.

Key Facts

  • 53% of Canadians feel their income isn't keeping pace with inflation.
  • 84% list inflation for everyday goods as a top financial concern.
  • 31% of Canadians expect a recession within 12 months.
  • 47% of Gen Z plan to take on more credit amid financial struggles.
  • Young Canadians are increasingly targeted by fraud, with 54% affected.

Companies Mentioned

  • CFX (CFX)
  • BAC (BAC)
  • JPM (JPM)

Industry News

The survey results indicate heightened credit activity, which is fundamental for TRU's business model.

Canadians' Financial Outlook Divided as Inflation and Recession Fears Shape Behaviors – TransUnion Canada Study

TORONTO, Jan. 13, 2026 (GLOBE NEWSWIRE) – A recent study by TransUnion (NYSE: TRU) reveals a growing divide in the financial outlook of Canadians as they grapple with inflation and economic uncertainty. The Q4 2025 Canada Consumer Pulse Study indicates that a significant portion of the population is exhibiting caution towards their finances, with more than half of respondents believing their household income is failing to keep pace with rising costs.

The Impact of Inflation on Daily Living

Inflation remains a pressing concern for Canadians, with 84% of surveyed individuals listing it among their top three financial worries. Specifically, 53% of respondents reported their household income isn’t keeping up with inflation, and almost a third (31%) expressed pessimism about their financial situation over the coming year.

Despite 20% of Canadians noticing an increase in their income within the last three months, a striking 25% indicated they are unable to pay at least one of their current bills or loans in full. This financial strain is particularly acute for certain debts:

  • Credit card payments or personal loans: 63%
  • Student loans: 55%
  • Mortgages: 45%

Canadians Prepare for Economic Uncertainty

As fears of a recession loom, over one in four (27%) Canadians believe the country is already in a recession, with another 32%% expecting one within the next year. Notably, 84% of those anticipating an upcoming recession are taking proactive measures, including:

  • Reducing spending: 61%
  • Building up savings: 38%
  • Paying down debt: 28%

Changing Spending Habits to Cope with Economic Instability

Recent economic conditions have prompted many Canadians to alter their shopping behaviors. Over two-thirds (67%) of respondents reported actively seeking out sales and discounts in the past three months, while other notable adjustments include:

  • Shopping at more affordable retailers: 44%
  • Buying generic or store brands: 41%
  • Using coupons more frequently: 31%

Concerns About Discretionary Spending and Retirement Savings

Despite the shift in consumer behavior, nearly 51% of those surveyed revealed they reduced discretionary spending, such as dining out and entertainment, in the last three months. Furthermore, 19% anticipate cutting back on retirement contributions, illustrating a clear prioritization of essential expenditures amidst rising costs.

Access to Credit: A Double-Edged Sword

The study highlights a paradox as 82% of Canadians consider access to credit essential for financial goals, yet only 56% feel they have adequate access. Among respondents, 21% plan to apply for new credit or refinance existing loans in the upcoming year, primarily amongst younger demographics:

  • Gen Z planning to obtain new or refinance credit: 47%
  • Millennials with similar intentions: 31%

Millennials currently account for approximately 38% of Canada’s total outstanding debt, totaling nearly $988 billion.

Credit Approval Concerns Persist

Remarkably, nearly 18% of Canadians do not believe they would qualify for new credit products if needed. Additionally, just over 20% of those intending to apply for new or refinance existing credit chose not to, citing fears of rejection stemming from credit history or employment status.

Fraud Targeting Younger Canadians

As economic digitalization surges, younger Canadians are increasingly targeted by fraud schemes. Almost 46% reported experiencing fraud attempts through various channels, with Gen Z showing the highest vulnerability at 54%. Common fraud tactics included:

  • Phishing: 43%
  • Smishing: 41%
  • Vishing: 41%

Despite these alarming trends, over a third (36%) of Canadians took no action to bolster their cybersecurity, highlighting an urgent need for increased public education on fraud prevention.

About TransUnion (NYSE: TRU)

TransUnion is a leading global information and insights company with over 13,000 associates across more than **30 countries**, including Canada. Known as the premier credit bureau in the Canadian market, TransUnion is dedicated to facilitating trust by ensuring accurate representation for individuals in the financial landscape.

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