No Rose-Tinted Glasses for Majority of Canadians; 64% Worry 2025 Will be a Challenging Year Financially; 83% Concerned President Trump's U.S. Tariffs Will Negatively Impact Their Finances, Reveals New H&R Block Canada Survey

78% plan to reduce spending; two-thirds embrace filing their taxes to put money back into their pocket; 65% expect a refund. 

• 92% of Canadians concerned Trump's trade tariffs will fuel higher cost-of-living.
• 64% are concerned about over-spending.
• 26% focused on living their best life versus staying on budget.
• 27% of monthly income goes to day-to-day essentials.
• 24% goes towards rent or mortgage payments.

CALGARY, AB, Feb. 27, 2025 /CNW/ - While Canadians have mixed views around their current financial well-being, many are nervous about their financial outlook, further fuelled by President Trump's announcement around U.S. trade tariffs imposed on Canada, reveals a new survey commissioned by H&R Block Canada. While more than half of Canadians (54%) say they feel good about their current financial situation, 46% aren't feeling upbeat. Overall, 64% of Canadians are concerned that 2025 is going to be a challenging year for them; 81% are concerned their income isn't keeping pace with the cost-of-living; 78% plan to reduce spending in 2025 due to the cost-of-living price pressures, and 42% are concerned about their ability to pay off debt such as credit cards, loans and mortgage payments.

The survey also explores how Canadians spend their hard-earned money across different categories, from rent, to their pets, health and wellness, and everyday essentials. Overall, the top 3 categories by percentage of monthly income include day-to-day essentials (which accounts for 27% of Canadians net income), rent and mortgage payments (24%), and credit card and loan payments (14%).

"Many Canadians are feeling the pinch of higher costs-of-living and are looking to manage spending and seeking ways to put money back in their pockets. This includes embracing filing their taxes, with nearly two-thirds of Canadians who are expecting a refund this year," said Yannick Lemay, H&R Block Tax Expert. "The good news is there are more than four hundred tax credits and benefits that help Canadians minimize their taxable income and maximize their refunds, from childcare, education credits, dental benefits, Canada Workers Benefit, and health and wellness related expenses, and many more."

Key Survey Findings

Canadians concerned President Trump's newly announced trade tariffs will negatively impact their financial situation: While inflationary and interest rate pressures have eased up a little over the last several months, the looming increase in trade tariffs imposed on Canada announced by President Trump sparked new concerns. Overall, 92% of Canadians are concerned that the impact of tariffs will further increase the cost-of-living, and 81% are concerned tariffs will negatively impact their finances. 

Around two-thirds of Canadians worry about spending within their means, whereas around 1 in 4 are more focused on living their best life: Worrying about over-spending is top-of-mind for 64% of Canadians, versus 26% who say they don't worry about over-spending as they're more focused on enjoying their everyday lives. Overall, 63% say they live comfortably at their income level; conversely 32% struggle to make ends meet each month.

When it comes to how Canadians spend their money, the survey reveals that the top three categories by percentage of income are day-to-day essentials, rent or mortgage payments, and credit card and loan payments. Below summarizes the average percent of net income that Canadians spend across different categories: 

• Day-to-day essentials (groceries, transportation, utility bills, insurance, etc.): 27%
• Rent or mortgage payments: 24%
• Credit card and loan payments: 14%
• Childcare related costs: 10% (among Canadians who have children)
• Technology and subscriptions (phone, internet, media streaming services, etc.): 10%
• Health and wellness (dentist, prescriptions, medicines, wellness services not covered by government funding, etc.): 8%
• Put towards savings account (high-interest savings account, tax-friendly savings account such as TFSA, RRSP, RESP, etc.): 8%
• Entertainment (going out, drinks and dining out, movies, concerts, etc.): 7%
• Food take-out and delivery services: 6%
• Apparel (clothes, shoes, etc.): 6%
• Put towards saving up for a vacation: 5%
• Pet care (food, vet bills, etc.): 5%
• Hair and aesthetic products and services: 4%

Around 2 in 3 Canadians embrace filing taxes to put money back in their pockets: The majority of Canadians are embracing this tax filing season as a means to put money back in their pocket. Nearly two out of three Canadians (65%) expect a refund this year, of which 35% indicate they're expecting the same or a bigger refund this tax season compared to previous years. However, a large portion of Canadians report having no idea whether or not they'll get a refund.

Limited confidence in knowing how to maximize their tax return and minimize any money owed: Overall, more than a third (37%) of Canadians don't feel they have a good understanding of all the new tax credits and benefits to maximize their return this year. Furthermore, around 1 in 4 Canadians (23%) report being part of the gig economy, of which 27% aren't clear on tax implications of any gig related income.

Most Canadians take a 'can't afford, don't buy' approach to spending but 1 in 4 turn to their credit card: Overall, 71% take a pragmatic approach to affordability and say that if they can't afford to pay for something with money in the bank, they don't buy it. A quarter of Canadians (24%) say they use their credit card or borrow money, and 5% typically use installment payments or buy-now-pay-later (BNPL) payment methods.

More than half of Canadians maintain a tight budget versus a third overspend: Just over 1 in 4 (27%) say they are frugal with their money as they're focused on saving up to buy a home in the future, versus 33% feel they may as well enjoy spending their money as buying a home seems out of reach.

A third of Canadians feel they may as well enjoy their money as buying a home feels out-of-reach: Just over 1 in 4 (27%) say they are frugal with their money as they are focused on saving up to buy a home in the future, versus 33% feel they may as well enjoy spending their money as buying a home seems out of reach.

"One way for Canadians to get some extra money is to file their taxes," said Lemay. "Each year there are thousands of Canadians that miss out on tax credits and benefits because they don't realize they're eligible for them. In fact, through our Second Look offering, we find missed tax credits and benefits from prior years for about 50% of Canadians, with an average refund amount of $2,900. Our advice to all Canadians is to file your taxes as soon as possible to get your refund earlier, and to ensure you understand all the tax benefits, credits and deductions you're entitled to based on your unique situation."

About the survey
These findings are from a survey conducted by H&R Block from February 12-13, 2025, among a representative sample of 1,469 Canadians. The survey was conducted in English and French. For comparison purposes only, a probability sample of this size would carry a margin of error of +/-2.53 percentage points, 19 times out of 20.

About H&R Block Canada
A trusted partner of Canadians for over 60 years, H&R Block Canada is Canada's tax leader. Serving almost 1,000 locations across Canada, H&R Block's team of Tax Experts use the latest in technological advances combined with real-world expertise to help people file taxes in office, through drop off service, upload their documents remotely, or use do-it-yourself Tax Software. H&R Block Canada can support in the preparation of personal, small business, corporate, U.S., rental, and estate taxes. H&R Block's comprehensive education program, Tax Academy, trains new experts and ensures our Tax Experts continually update their skills. Learn more at www.hrblock.ca or 1-800-HRBLOCK.

SOURCE H&R Block Canada Inc.

For more information, contact: Katie Duffy, H&R Block c/o Ketchum, [email protected], 647-772-0969