Many Canadians had already been living through what felt like a recession well before the economy officially entered one, according to new analysis from Harris & Partners examining consumer sentiment and financial stress over the past two years.
Following confirmation that Canada’s economy contracted for a second consecutive quarter — meeting the standard definition of a technical recession — Harris & Partners reviewed results from multiple nationwide surveys conducted throughout 2025 and 2026 involving more than 6,500 Canadians.
The findings point to widespread financial strain that predates the official recession announcement, with Canadians reporting rising costs, job insecurity, mounting debt concerns and significant changes in daily spending behaviour.
Among the strongest indicators of financial pressure:
- 95.2 per cent said rising costs have affected their finances
- 91.6 per cent said they have changed how they manage money because of economic conditions
- 91.0 per cent said their financial situation can change quickly due to factors outside their control
- 88.0 per cent said they have postponed or cancelled travel, major purchases or other plans because of rising costs
- 87.0 per cent said they feel financially trapped due to debt or living expenses
The analysis comes after a difficult stretch for Canada’s labour market. More than 112,000 jobs were lost between January and April, while the unemployment rate climbed to 6.9 per cent before easing slightly in May. Younger Canadians have been particularly affected, with youth unemployment remaining well above the national average.
The changing employment environment has intensified debate around labour market opportunities for younger workers as Canada reassesses temporary resident and temporary foreign worker levels following years of rapid population growth.
“The technical recession may only have recently been confirmed, but many Canadians have been feeling the effects of economic uncertainty for some time,” said Joshua Harris, chief executive officer of Harris & Partners and a licensed insolvency trustee.
“Across multiple studies conducted over the last year, we’ve consistently seen the same themes emerge: rising costs, delayed plans, financial insecurity and growing stress about the future.”
The surveys show many households have already adjusted spending habits in response to worsening conditions. Nearly half of respondents said they reduced spending, while more than one in five delayed purchases altogether. Others reported relying on savings or increased credit use to cover everyday expenses.
The impact is extending beyond finances alone. More than three‑quarters of respondents said job or financial stress has negatively affected their mental health, while 58 per cent said they felt emotionally drained or burned out over the past year. More than one‑third said they had skipped meals or essentials to make ends meet, and one in three reported using credit for basic living costs such as groceries, rent or household bills.
“When people start delaying major purchases, cancelling plans and changing how they manage money, it often reflects uncertainty about what lies ahead,” Harris said. “Households become more cautious because they feel less confident about their financial stability.”
The report noted that younger Canadians may face some of the longest‑lasting effects. Harris said elevated housing costs, rising living expenses and a more competitive job market are making it harder for younger workers to establish savings and financial independence.
“For younger Canadians in particular, the current environment is proving challenging,” he said. “Entering the workforce, building savings and planning for the future becomes far more difficult when employment opportunities are less certain.”
Harris & Partners said the research highlighted how economic downturns extend far beyond GDP figures and economic forecasts, affecting mental health, consumer confidence and long‑term financial stability.
The firm is encouraging Canadians experiencing financial strain to seek professional advice early, review household budgets regularly and explore support options before debt problems become unmanageable.
Image credit: Depositphotos.com
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