Half of Canadians say income isn't keeping pace with inflation, TransUnion Q2 survey finds
Canadians are showing early signs of financial recovery, but the cost-of-living squeeze is far from over, and for mortgage brokers helping clients navigate credit decisions, the pressure points remain deeply relevant.
TransUnion Canada's Q2 2026 Consumer Pulse Study found that 45% of Canadians surveyed are optimistic about their household finances over the next 12 months.
Twenty-four percent said their finances have performed better than expected so far this year, the highest share recorded in the past year.
Despite that, 50% reported that their income is not keeping pace with inflation, and 86% ranked inflation among their top three household financial concerns.
"Many Canadians are beginning to see improvements in their financial outlook and have adapted to sustained periods of economic uncertainty," said Matt Fabian, senior director of financial services research and consulting at TransUnion Canada.
"While improving incomes and easing economic conditions are helping households regain their footing, affordability continues to shape everyday financial decisions."
Read more: Inflation's retreat opens a window — but don't expect a rate cut
Spending restraint and selective borrowing
The affordability lens is still governing how Canadians spend. Of those surveyed, 51% cut back on discretionary spending — including dining out, travel and entertainment — while 26% cancelled subscriptions or memberships and 18% chose to accelerate debt repayment.
One counterpoint: 11% actually increased discretionary spending, up three percentage points year over year, suggesting a small but growing cohort is regaining financial flexibility.
On the credit front, 25% of Canadians plan to apply for new credit or refinance existing obligations over the next year, unchanged from a year ago. Younger Canadians are driving that demand. Forty-eight percent of Gen Z consumers and 37% of Millennials plan to borrow or refinance.
Credit cards remain the product of choice, with 49% of prospective borrowers targeting a new card.
Read more: Why more Canadians are choosing brokers over banks in 2026
Still, hesitation is widespread. About 21% of Canadians considered applying for credit but pulled back. Of those, 29% decided they didn't need additional debt, while 26% cited the cost of credit as the primary deterrent, a signal that rate sensitivity remains high.
"Consumers continue to recognize the value of credit, but they're carefully weighing borrowing costs, eligibility and their financial needs before making decisions," Fabian said.
Mortgage arrears in Canada have climbed from pandemic-era lows, reaching 0.28% of outstanding mortgages — but a new economic analysis from Desjardins Economic Studies argues the peak may already be approaching. https://t.co/BU0kL7Hlwr
— Canadian Mortgage Professional Magazine (@CMPmagazine) July 17, 2026
Fraud awareness reshaping financial habits
A less-discussed but significant finding: fraud exposure is changing how Canadians manage their credit health. The study found that 44% of respondents were targeted by fraud in the past three months without becoming victims, and 20% were notified they had been affected by a data breach.
Against that backdrop, 40% of Canadians now check their credit report at least monthly, up three percentage points year over year, driven more by fraud detection than credit score improvement.
Knowledge gaps persist, however. One third (33%) of consumers took no action to address cybersecurity risks, and more than half of that group said they were unsure what steps to take.
For brokers, these figures reinforce the value of proactive financial conversations. With the Canadian housing market revival hitting pause and a major renewal wave still underway, clients who are financially stretched and fraud-aware are looking for trusted guidance on both sides of the balance sheet.
Earlier TransUnion data found that since March 2022, over two million Canadians have seen their monthly mortgage payments rise by an average of 25%, from $1,527 to $1,908 as of March 2025.
The Q2 2026 results suggest that while some of that financial strain is easing at the edges, the structural pressures have not fundamentally shifted. Brokers advising clients on renewal timing, refinancing options, and credit management will find no shortage of relevance in these numbers.
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