Gas prices surged 28.6 per cent after a 5.9 per cent increase in March as a result of the war in Iran. (Credit: JONATHAN JUHA/The London Free Press files)
Some Canadians are taking a step back from summer splurges as pricing pressures heat up, according to a survey released this week by Toronto-Dominion (TD) Bank.
About 35 per cent of Canadians intend on spending less this summer compared to last year.
“People are watching their dollars a little bit more carefully,” said Leslie Logan, a senior financial planner at TD Bank, who noted Canadians tend to spend more over the summers, especially when it comes to taking trips and vacations. “We are a bit more pinched across all the generations.”
Inflation rose to 2.8 per cent in April, according to the latest data from Statistics Canada, largely due to higher energy prices. Gas prices surged 28.6 per cent after a 5.9 per cent increase in March as a result of the war in Iran — putting a dent in Canadians’ travel plans, according to TD.
Among those cutting back this summer, 40 per cent said higher transportation costs were a major concern. About 62 per cent said they planned to redirect spending towards everyday needs, such as groceries, fuel and housing costs.
Across generations, 36 per cent of generation Z, 38 per cent of millennials, 42 per cent of generation X and 26 per cent of baby boomers plan on spending less. That said, nearly a quarter of gen Z respondents plan on increasing their summer spending — the highest across all generations and above the overall average of 18 per cent who said the same.
Logan said this isn’t surprising for a generation that is just starting to come into their own.
“They’ve got their first jobs, they’re graduating, and they’re really getting into experiencing life, and I don’t blame them for that,” she said. “They are less likely to have kids, marriages, mortgages. They’re less likely to be thinking about their retirement.”
With fewer financial responsibilities compared to older generations, Logan said gen Z can afford to be a bit more flexible with their spending now.
About 28 per cent of gen Z said they plan to travel more this summer (compared to 18 per cent of all respondents), and 22 per cent are interested in attending concerts, festivals or sporting events (as opposed to 16 per cent of all respondents).
Social pressures and social media have intensified a “Keeping up with the Joneses” mindset among younger Canadians too, Logan cautioned.
Still, though the data suggests gen Z spending could be less sensitive to pricing pressures, this doesn’t necessarily mean younger Canadians are ignoring their financial future, said Logan.
“Even as they lean into experience-driven spending, many are still redirecting savings toward meaningful goals.”