Consumers plan to spend carefully for the holidays this year, as budget pressures and trade tensions reshape consumer habits in the retail landscape this season, according to PwC’s 2026 Canadian holiday outlook.

The report said Canadians plan to spend 11 per cent less this holiday season than last, for an average of $1,487 on gifts, travel and entertainment. Households with children plan to spend nearly double those without.

Holiday shoppers are also making choices and trade-offs accordingly as spending contracts. Travel is set to see the the steepest category decline in spending, down 14 per cent, as many travellers plan to remain close to home or stay with friends and family.

But less spending overall doesn’t mean less shopping activity, as consumers plan to look for discounted pricing and promotions.

“We’re seeing the rise of an active but cautious shopper,” the report said.

This year, 75 per cent of Canadian consumers say they’re taking steps to stretch their spending, while 69 per cent plan to purchase less expensive alternatives.

They also plan to be strategic about when they do their shopping. Younger generations plan to concentrate their shopping this year around peak promotional windows over the Black Friday weekend , while older generations plan to delay their spending into December.

A significant majority of Canadian consumers say deals and discounts will influence their holiday shopping.

The report said retailers that continue to align their promotional cadence to Black Friday and December will be better positioned to move inventory.

Meanwhile, elbows are still up as Canadian consumers show patriotism with their wallets.

As trade tensions sharpen focus on product origin, support for Canadian products is expected to remain strong as a majority of consumers are willing to pay more for domestic goods, giving retailers an opportunity to differentiate on origin and value.

Despite planning to spend less overall this holiday season, buying Canadian has become even more important to shoppers.

The survey said more than half or 54 per cent of consumers say they’ll pay more for a Canadian-made product, up from 49 per cent last year. Plans to cross-border shop stay roughly half of historic levels.

“Just like last year, we see further evidence of Canada-first sentiment in the low number of consumers planning to cross-border shop this holiday season,” the report said. Just over one out of ten Canadian consumers plan to cross-border shop, down from 20 per cent in 2024.

The survey was conducted in July and early August before the recent round of tariff escalations, so the numbers may under-represent current Canadian sentiment, it said.

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About 72 per cent of Canadian consumers continue to actively look for alternatives to U.S.-made products as they do their holiday shopping.

The trade dispute could also affect holiday prices. New Canadian surtaxes on select U.S.-origin goods could increase costs for some importers and retailers. Separate U.S. measures may also create additional costs and market-access challenges for Canadian exporters.