Canadian companies are painting a stark picture of a consumer who’s pulling back on spending, as rising debt payments and inflation force households to change their behavior. From big-box retailers to toy marketers to coat manufacturers, recent corporate earnings results and executives’ comments underscore how quickly the economic temperature is changing after two years of robust growth.
Canadians have the highest household debt levels among Group of Seven countries, and they feel the pinch of higher rates sooner than US consumers because their mortgage terms tend to be shorter. More than a third of mortgage borrowers have seen their payments increase since February 2022, according to central bank data. Consumer weakness spilled into full view in Canadian Tire Corp.’s third quarter as its customers curbed spending on non-essential items, pushing comparable sales down 1.6% relative to the previous year