Canadians to spend more on vacations and/or travel than in 2023 says BMO image credit shutterstock

Canadians plan to spend more on vacations and/or travel (20%), home renovations (15%), weddings for family and/or friends (10%) and special events such as graduations and showers (9%) this summer compared to 2023.

The numbers are revealed within BMO’s Real Financial Progress Index.

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Household spending continues to be a primary driver of economic growth. According to BMO Economics, consumer confidence will likely improve following the Bank of Canada’s first rate cut in four years. Moreover, analysts forecast another two rate during 2024 and several more in 2025.

“Inflation is showing continued signs of calming. This opens the door for further rate cuts by the Bank of Canada,” said Sal Guatieri, Senior Economist, BMO.

“Lower borrowing costs and slower-rising living costs should provide sufficient relief to support moderate 2% growth in consumer spending this year and next.”

BMO Real Financial Progress Index key takeaways

  • Summer Travels: One-in-five Canadians (20%) plan to spend more on summer travel. 38% plan on spending the same as in 2023 while 15% plan to spend less than last year.
  • Celebrating Milestones: Nearly a tenth of Canadians plan to spend more on weddings (9%) and special events such as graduations and showers (9%) for family and friends. More than a fifth (22%) plan to spend the same on weddings for family and/or friends and more than a quarter intend to spend the same as last year on special events (27%).
  • Ramping Up Home Renovations: 15% plan to spend more on home renovations. Nearly a quarter (24%) will spend the same as last year. 13% intend to spend less on home renovations in 2024.
  • Summer Splurges: For those planning on making a large purchase, including buying a car, 18% plan to spend the same and 10% plan to spend more than they did in 2023.
  • Climbing Summer Camp Costs: 15% of parents with children under the age of 18 plan to spend more on summer camps and/or childcare and 36% intend to spend the same as last year.

Many Canadians plan on spending more this summer and 85% believe they are making real financial progress. But nearly half (48%) admit they spend more than they know they should. Some 15% say impulse shopping has prevented them from making financial progress.

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“Many Canadians like to make the most of the relatively short summer and look forward to spending the season travelling, celebrating milestones and making memories with friends and family,” said Gayle Ramsay, Head, Everyday Banking, Segment & Customer Growth, BMO.

“However, too much fun under the sun without a budget can lead to overspending. You may find yourself drifting away from your financial goals. Working with a professional advisor can help Canadians build a personalised financial plan that allows them to enjoy the summer while staying on track towards their goals and make real financial progress with confidence.”

Loyalty Program Rewards

As the majority of Canadians indicate that they are now more concerned about inflation (56%) and the cost of living (58%) than they were 3 months ago. Many are redeeming rewards earned from their loyalty programs such as Air Miles to cover expenses and finance their summer spending plans.

Over half (56%) of Canadians plan on using rewards earned from loyalty programmes on grocery purchases. This is followed by vacations (27%), entertainment experiences including dining and tickets (20%) and paying monthly bills (17%). Redeeming reward points on grocery purchases is popular among Canadians of all ages. Gen X (61%), boomers+ (57%), millennials (55%) and Gen Z (49%), and millennials and Gen Z are the most likely to use their points for vacations (32% for both age groups) and entertainment experiences (29% for Gen Z and 25% for millennials).