If someone asks you “how’s your cold?” and you answer “a bit better,” it likely means you’re still feeling pretty bad. This is a good way to summarize the latest results from the Bank of Canada’s Canadian Survey of Consumer Expectations.

Conducted in August, the survey found that Canadians were “less pessimistic” about their financial health and “somewhat less negative” about their spending. At the same time, they see the labour market getting worse.

Combining how consumers view these three things into a single indicator, the Bank found that, despite some improvement since spring, the August reading “remains below levels observed prior to the trade conflict with the United States and well below the historical average” (see the chart below).

Trade tensions are sitting behind this with the Bank of Canada reporting that “consumers still feel that tariffs and trade uncertainty are weighing on their financial health.”

These results reinforce other weak economic data including an elevated unemployment rate and tepid GDP growth forecasts as well as comments we’ve been getting while out on the road talking about the economy. It’s not the deep recession feared back in the spring, but it’s no picnic either.

The trade situation has not been static since August when the survey was conducted with some Canadian counter-tariffs lifted, new U.S. sectoral tariffs added or threatened, and progress on a new “deal” with the United States hard to determine.

Given the ups and downs on this front so far, the potential for a general tariff and/or sectoral tariffs to remain in place even under a new deal with the U.S., and the uncertainty surrounding the timing and outcome of the review of the Canada-United States-Mexico Agreement, it’s likely that trade tensions will weigh on how Canadians are feeling about their personal finances and the broader economy for some time to come.

At the same time, if Canada is able to gain some economic traction in other areas (e.g., getting shovels in the ground on major projects and expanding trade with countries other than the U.S.), this would help offset the ongoing drag from tariffs and tariff-related uncertainty.

So while the tariff-induced cold is going to be a tough one to get rid of, hopefully things will keep getting “a bit better” as we adapt to a new trade relationship with the U.S. and move forward on putting our domestic economic house in order.

Answer to the previous trivia question: As of December 2024, a total of 103,819 businesses (58.5%) in Alberta were micro-businesses with between one and four employees.

Today’s trivia question: How many kilometres is it from Toronto to Los Angeles?