As Canadians navigate an unpredictable post-pandemic economy in 2025, a familiar anxiety is resurfacing at grocery store checkouts and gas pumps alike: is our money going less far than it used to? The answer isn’t black and white, but one thing is clear — most Canadians are feeling the pinch.
Inflation: Cooling, But Still Biting
According to Statistics Canada, inflation has calmed compared to the chaos of 2022 and 2023. The latest data from April 2025 puts year-over-year CPI growth at 1.7%, with core inflation (excluding food and energy) hovering around 2.9%.
So why does it still feel expensive? Because prices never went back down — they just stopped climbing so fast. Even with the slowdown, the average Canadian dollar buys about 99 cents worth of what it did a year ago.
Wages: Holding the Line — For Now
Here’s the silver lining: wages haven’t totally fallen behind. The OECD projects nominal wage growth of around 2.3% for both 2024 and 2025. Real wage growth was up about 2.1% last year, and early 2025 data shows private-sector salaries growing at a 3.3% to 3.6% clip.
Translation? If you’re working, you may have just enough raise to keep up — or slightly pull ahead — of inflation. But it depends on where you live and what you do.
Canadians Are Spending Less — And Watching Every Loonie
Consumer behavior is telling a cautious story. According to Fitch Ratings, consumer spending in Canada is expected to grow just 1.1% this year — a major slowdown from 2.6% in 2024. That’s not a crash, but it is a red flag.
Households are leaning into frugality: dollar stores are booming, secondhand apps are thriving, and household debt is creeping higher. Credit card balances are up, and more people are delaying major purchases like vehicles or home renovations.
The Big Picture: Interest Rates and Global Wobbles
The Bank of Canada kept its benchmark rate at 2.75% in April, signaling uncertainty on the horizon. Rising tariffs from the U.S., energy market volatility, and a weaker global trade position are all weighing on the outlook.
Canada’s terms of trade — the value of exports vs. imports — have also declined, driven by falling demand from China and other key markets. This puts pressure on earnings, investment, and yes, wages.
What People Are Actually Saying
In a recent Ipsos poll, 58% of Canadians said they felt worse off financially than last year. Even with inflation slowing, sentiment hasn’t caught up.
Social media is flooded with relatable venting:
“Groceries are down from $300 to $290. Not exactly doing backflips here.”
“My landlord just raised rent by $200 and told me to be happy because it could’ve been more.”
Even Reddit’s r/PersonalFinanceCanada is trending with posts like: “Inflation’s better but my budget’s still wrecked. Am I doing something wrong or is this just adulthood now?”
Breakdown: Where We’re At
| Metric | 2025 Snapshot |
|---|---|
| Inflation | 1.7% (down from ~4%+ highs) |
| Wage Growth (nominal) | 2.3% |
| Wage Growth (real) | 2.1% in 2024, similar in 2025 |
| Spending Growth | Slowing — forecast 1.1% |
| Financial Sentiment | Cautious, especially among youth |
Bottom Line
Canada isn’t in a crisis — but it’s definitely in a tight spot. Buying power has technically declined, even if slightly. Wages are keeping pace, but only just. And everyday costs still feel heavier than they look on paper.
Unless there’s a surge in productivity, or a policy shift that puts more money in people’s pockets, this cautious equilibrium might be the new normal.
Marc has been involved in the Stock Market Media Industry for the last +5 years. After obtaining a college degree in engineering in France, he moved to Canada, where he created Money,eh?, a personal finance website.
