OTTAWA — Fears of a trade dispute with the United States have pushed consumer confidence in Canada to its lowest level in more than a year, according to a new report.
The Conference Board of Canada said Monday that its Index of Consumer Confidence, a broad measure of how Canadians are feeling about the economy, fell more than 12 points to 52.6 in February, the largest one-month drop in more than a year and a half.
That's the lowest point in the Conference Board's consumer barometer since hitting 51.5 in November 2023 and 47.6 in April 2020.
The confidence index floated at around 120 points in the first decade of the 2000s, taking hits during the global financial crisis and COVID-19 pandemic and largely holding below 80 points in the past few years.
The survey, based on Leger polling, doesn't ask Canadians what specifically is weighing on their confidence.
But Cory Renner, the organization's associate director of economic forecasting, said in an interview that the context is clear.
“We’re in a peak period where there’s a lot of worry about what our largest trading partner is doing and that’s got a lot of people worried," he said.
Just over a third of Canadians (33.9 per cent) said their own personal finances are worsening, up 2.7 percentage points from last month.
Renner said that Canadians, particularly those working in manufacturing positions that are among the most susceptible to disruption if the U.S. moves ahead with tariffs, are gripped by the prospect that their job could be the casualty of a trade war.
“Say you're a factory worker in Ontario. If they put tariffs on the border, that could really hurt the industry," he said.
“At the breakfast table you're thinking, 'Am I going to lose my job?' I think that's where the consumers are really feeling it.”
Renner said that Canadians were surveyed for the latest Index of Consumer Confidence after U.S. President Donald Trump put a one-month pause on imposing broad tariffs against Canada in early February; if the polling were done even a week earlier, he said sentiment could have been even more pessimistic.
The Conference Board's latest findings come despite recent signs of stability in inflation and falling interest rates. But the organization also warned that, if tariffs are applied, the Canadian economy could face both a recession and a resurging cost of living.
Renner said that many forecasters had been expecting a rebound in consumer spending would fuel economic growth in 2025, but the latest chill in confidence puts that outlook in question.
A growing proportion of Canadians (62.6 per cent) told the Conference Board that they feel it's a bad time to make a major purchase, though sentiment around buying big-ticket items is marginally better compared to last year.
Pessimism about future job opportunities also rose to its worst level in more than four years, according to the index.
Renner said the weak consumer confidence could hold back some early activity in the typically busy spring housing market, but he added it could be a "wash" with lower interest rates stirring up demand among would-be homebuyers.
Whether tariffs are actually applied or not could have a bigger say in whether hopes for a housing market rebound fizzle, he said.
Trump told reporters on Monday that broad tariffs on Canadian imports were "on time" for March 4. He has also signed orders imposing 25 per cent tariffs on steel and aluminum entering the U.S. as of March 12.
Confidence could rebound if Canadian officials are able to negotiate a way past Trump's tariff web, Renner said, but until then, consumers could be more likely to save then spend.
“Whether or not this threat hangs over us for a long time is, I think, the big question for the economy in 2025.”
This report by The Canadian Press was first published Feb. 25, 2025.
Craig Lord, The Canadian Press
