Consumers could start feeling financial relief by 2027, says CIBC

Canadian consumers might see a financial reprieve in 2027 as key economic pressures are predicted to lessen, according to a new report from CIBC.

“

We view 2026 as a transition year, with expectations for trade clarity ahead, while many of the constraints on consumers that are currently in place should fade in 2027.

Senior economist Katherine Judge at CIBC stated that 2026 is viewed as a transition year, with expectations for clearer trade conditions and the fading of current constraints on consumers. "So we are cautiously optimistic that better economic times lie ahead," she said.

The report, titled 'Unshackled? How the constraints on Canadian consumers should loosen in ‘27,’ highlights several factors expected to ease. These include high inflation, a spike in gasoline prices linked to the Iran war, and the shock of mortgage rate renewals pushing homeowners into higher payments compared to the COVID-19 pandemic era. While prices are not expected to decrease significantly, affordability for some goods and services should improve.

“

So we are cautiously optimistic that better economic times lie ahead.

"Canadian consumer spending has been held back by a number of restraints in recent years," the report notes. High inflation for essentials like food, mortgage renewals at higher rates, and recent gasoline price surges have left households with less disposable income. However, the report suggests these restraints could loosen in 2027.

“

Canadian consumer spending has been held back by a number of restraints in recent years.

Lower-income Canadians have been disproportionately affected by elevated gas prices in 2026. While federal income support measures offer some offset, CIBC suggests that a decrease in gasoline prices could further enhance spending power. The Bank of Canada has previously warned that sustained high oil prices could eventually spill over into other goods and services, but for now, the tightest restraint from gas prices may have passed.

“

However, that could change, with some of the restraints to spending likely to loosen in 2027.