Fewer feel the pinch, yet caution still rules spending, credit, and fraud defence
Half of Canadians say their incomes are not keeping pace with inflation, even as more households report rising pay and growing optimism about the year ahead.
That gap sits at the centre of TransUnion's Q2 2026 Canada Consumer Pulse Study.
Fifty percent of respondents said their income was not keeping up with rising prices, down three percentage points from a year earlier, while 28 percent said it was.
Inflation remained the dominant worry, according to the study, with 86 percent of consumers ranking it among their top three household financial concerns, ahead of housing prices at 51 percent, recession at 49 percent, and interest rates at 41 percent.
Sentiment nonetheless improved.
The study found that 45 percent of Canadians felt optimistic about their household finances over the next 12 months, up from 40 percent a year earlier, and 24 percent said their finances were better than planned so far in 2026, the highest reading in a year.
One quarter reported a household income increase over the previous three months, a gain of six percentage points, while the share reporting a decline fell to 15 percent.
Those gains have not loosened spending.
More than half of respondents (51 percent) said they had cut back on discretionary spending such as dining out, travel, and entertainment, per the survey, and 26 percent cancelled subscriptions or memberships.
Some early signs of easing appeared, with 11 percent reporting higher discretionary spending, up three percentage points year over year.
Canadians have not retreated from borrowing.
A quarter of those surveyed planned to apply for new credit or refinance existing credit over the next year, unchanged from a year earlier, with demand concentrated among younger consumers: 48 percent of Gen Z and 37 percent of millennials said they intended to do so.
Nearly half of prospective borrowers (49 percent) pointed to a new credit card, the study found.
Roughly one in five consumers (21 percent) considered applying for credit but did not follow through.
Among that group, 29 percent said they decided they did not need it and 26 percent cited the cost of borrowing, according to the study, while 22 percent and 20 percent respectively believed they would not qualify because of their credit history or their income and employment status.
"We're seeing Canadians become more intentional in how they approach credit," said Matt Fabian, senior director of financial services research and consulting at TransUnion Canada, adding that consumers were weighing borrowing costs, eligibility, and their financial needs before deciding.
Fraud exposure climbed.
The study reported that 44 percent of Canadians were targeted by fraud in the past three months without becoming victims, up four percentage points, and that 20 percent had been notified of a data breach.
Credit monitoring is becoming more routine as a result, with 40 percent checking their credit report at least monthly, up three percentage points, and more consumers doing so to detect fraud and confirm accuracy rather than to lift their scores.
Even so, one third of respondents took no action on cybersecurity concerns, and 51 percent of them said they were unsure what to do.
The survey window closed before Canada's inflation rate swung sharply on energy costs.
Statistics Canada data released on 20 July showed the consumer price index eased to 2.8 percent in June, as a Middle East ceasefire pulled gasoline prices lower, CBC News reported, down from a two-year high of 3.2 percent in May.
The Bank of Canada, meanwhile, held its benchmark rate at 2.25 percent on 15 July, its sixth consecutive hold, The Canadian Press reported, with the central bank expecting the economy to rebound after a weak start to the year.
