BMO Financial Group says many Canadians are scaling back or shifting their holiday purchases as higher tariffs and rising prices reshape year-end budgets.

A new survey shows households are preparing for a costlier season as economic pressures build.

More than three in five respondents adjusted their festive plans because they expect tariffs to drive prices higher, the company said.

Also Read: Impending Recession? US Consumer Spending Shows Worrying Signs

Canadians Brace For Higher Costs

The latest BMO Real Financial Progress Index found 61% of Canadians are changing how they shop this year.

Many shoppers are seeking items less exposed to tariffs, while some are choosing goods made in Canada. Others are trying to get ahead of possible increases by securing gifts earlier in the season.

Survey participants expect to spend an average of $2,310 this season. That amount includes travel, groceries, entertainment, clothing, electronics, toys and other holiday categories.

Analysts attribute the pressure to a mix of rising food prices, increased unemployment and renewed inflation concerns.

Consumers Shift Spending Priorities

Many shoppers plan to cut expenses on decorations, travel, dining out and other discretionary items. At the same time, 25% intend to spend more on groceries than they did last year. Canadians are also seeking discounts, buying lower-cost gifts and spreading out purchases across several weeks.

Financial Stress Remains High

Half of survey respondents say holiday spending causes stress. More than one third feel pressure to match others' spending, and many admit sacrificing long-term savings to cover seasonal purchases. Younger generations are the most likely to take extra work to pay for holiday bills.

Managing Bills And Budgets

Canadians expect to take more than two months to clear their holiday balances, though some are uncertain when repayment will be possible. Many plan to shorten their gift lists or reduce shopping for birthdays and other occasions to offset December expenses.

Budgeting Habits Grow Stronger

About 68% say they are trying harder to stay within a set budget this year. Some shoppers saved throughout the year, while others leaned on sales or discount retailers.

Many are using digital tools to track their finances, manage credit and plan for next year's purchases.

Read Next

• Survey Unveils American Misconceptions About Credit Card Debt Management

Image: Shutterstock/Andrew Angelov