Since promising, and then eventually unleashing, sweeping tariffs that have upended economic stability and eroded international allyship (1), Donald Trump’s trade war with Canada has prompted Canadians to fight back with their wallets and focus their purchasing power on domestically-made products.

However, as we enter the first holiday season since these tariffs were implemented, shoppers who exclusively buy Canadian will have their resolutions tested by a rising cost of living.

A self-described “very proud Canadian,” Ann-Marie Brooking has been leaning into buying Canadian products, she tells CBC News (2). As she approaches the holiday season, her resolve has only galvanized, but factors other than Canadian patriotism weigh on her mind.

“Just with the cost of living, our bills, maintaining homes, grocery prices, the added expenses of putting our children in sports, for example, all of those factors obviously come into play,” Brooking told CBC.

Brooking’s concerns about the cost of living are well-founded. Grocery prices have ballooned 3.4% since last October and shelter costs are up 2.5% over the same period, Statistics Canada reported (3). As people spend more on necessities like groceries and shelter costs, the less they have for discretionary costs like buying gifts and spending on holiday travels.

Inflation is going to test shoppers who are keen on supporting Canadian businesses and products this holiday season, but so far many are holding strong — so long as they don’t face massive price swings. The Retail Council of Canada’s 2025 Holiday Shopping Report (4) found that 84% of Canadians plan to “seek out Canadian-made products,” but “price and perceived value still drive final purchasing decisions,”

“Over 60% told us that price is going to be the number one factor,” Jim Cormier, Atlantic director for the Retail Council of Canada, told CBC.

The survey was conducted in October 2025, and since then, it appears Canadians have become even more cost-sensitive.

Read more: Here are 5 expenses that Canadians (almost) always overpay for — and very quickly regret. How many are hurting you?

The latest BMO Real Financial Progress Index, completed in November 2025, found that 61% of Canadians are adjusting their holiday spending plans “in anticipation of rising costs caused by tariffs (5).” More specifically, 41% plan to allocate less to holiday purchases, while 25% expect to spend more on food and groceries this season.

Statistics Canada recently reported that the cost of groceries is outpacing the cost of all other items in its consumer price index combined. Grocery prices alone are causing people to adjust their holiday budgets.

Canadian employment is also suffering, which harms families’ spending power. The employment rate is the lowest it has been since January 2018, excluding the pandemic years (6). As less people work, the less money they have to indulge in non-essential purchases.

With over half of Canadians adjusting their spending patterns due to cost concerns, you might be wondering if you can afford the holidays this year. Thankfully, there are a number of easy, actionable steps you can take to help ease some of your financial stress.

Budget around your key financial goals. Instead of spending during the holidays on a whim, figure out your most important financial goals (e.g. retirement, saving up for a home, building emergency savings) first and then budget for holiday spending. This way, your major financial milestones don’t get pushed aside.

Shop strategically. Don’t shop without knowing what deals are available — it’s important to take advantage of any savings while they last.

Think outside the giftbox. There are multiple ways to give thoughtful gifts without spending a dime. If you’re tight on cash, consider making a gift or creating a memorable experience for someone instead.

Between the tariff wars with the U.S. and the rising cost of living, you may feel the need to cut back on holiday spending this year. But that doesn’t mean having to buy non-Canadian products or skimping on the holiday cheer altogether. It just means being more strategic with your spending and finding unique ways to create lasting memories with your loved ones.

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Associated Press (1); CBC News (2); Statistics Canada (3, 6); Retail Council of Canada (4); BMO (5)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.