Canadian Consumer Spending 2025: Entertainment Outpaced All Other Categories, TD Report Shows
A new TD Economics consumer spending report reveals that in 2025, entertainment outpaced all other categories in Canadian consumer expenditure growth. With entertainment spending expanding significantly more than sectors like travel or groceries, the data suggests a notable shift in how Canadians allocate their budgets in a changing economic environment. Yahoo Finance+1
Key Highlights of the 2025 Spending Trends
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Entertainment emerged as the fastest-growing category in consumer spending in Canada in 2025, rising by approximately 10.2 per cent year-over-year from January through November. This was more than any other category tracked in the report. Yahoo Finance
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The growth in entertainment was broad and included spending on recreation, concerts, dining out, theatre, and other leisure activities, reflecting increased consumer appetites for experiences over goods. TD Economics
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Overall consumer spending growth on credit and debit cards climbed roughly 5.4 per cent in 2025, slightly above 2024 growth, indicating a resilient spending environment supported partly by lower interest rates. TD Economics
What Drove the Boom in Entertainment Spending?
According to TD’s analysis of credit and debit card data, “recreation and entertainment” captured the largest share of total consumer expenditure and exhibited the most rapid acceleration across categories in 2025. TD Economics
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Many Canadians resumed or increased spending on experiences following the pandemic years, choosing entertainment and activities that enhance quality of life.
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The removal of certain taxes, shifts in discretionary income, and heightened confidence around leisure spending also contributed to the trend. For more, read about general consumer spending behaviour and interest rate effects on household budgets. Yahoo Finance
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Lower interest rates helped ease borrowing costs, encouraging households to spend more freely, especially on services and experiences. TD Economics
This trend aligns with broader observations that Canadians have been allocating more to services relative to goods in recent years, a shift that mirrors changes in global consumer preferences. TD Economics
Comparison With Other Spending Categories
While entertainment soared, other spending categories showed varied performance in 2025:
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Travel spending softened compared to entertainment gains and traditional U.S. travel saw a decline, possibly influenced by tariff concerns and currency fluctuations. TD Economics
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Home-related categories experienced some recovery, with home improvement and furniture spending improving marginally after contraction in earlier years. TD Economics
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Essentials like supermarkets maintained stable growth, but gas station spending declined significantly in response to lower fuel prices following policy changes. TD Economics
These results underscore the evolving priorities in Canadian household budgets as consumers increasingly value experiences and discretionary activities over basic goods. TD Economics
What This Means for the Canadian Economy
The entertainment-led growth in consumer spending has several implications:
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Economic resilience: The fact that discretionary entertainment spending expanded rapidly even as some sectors struggled suggests that Canadian consumers may be more resilient and willing to prioritize lifestyle options despite economic pressures.
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Shift to services: The emphasis on services and experiences continues to grow, highlighting the importance of sectors like hospitality, arts, live events, and recreation in driving domestic economic activity.
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Consumer confidence: While general consumer confidence has fluctuated due to broader macroeconomic forces, the strong performance of entertainment spending indicates that households feel comfortable allocating resources toward leisure and non-essentials.
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Inflation and interest rates: Lower borrowing costs have played a part in supporting spending, a trend also observed in other consumer research on spending behaviour in 2025. Yahoo Finance
For businesses targeting the Canadian market, these findings suggest potential opportunities in sectors tied to experiences, services, and cultural engagement.
Looking Ahead to 2026
While entertainment was the clear leader in consumer spending growth for 2025, forecasts indicate that overall personal consumption growth may moderate in 2026, reflecting broader economic headwinds and a more cautious spending environment. Real personal consumption is projected to rise more modestly, likely dampening some of the extraordinary gains seen in 2025. TD Economics
Still, trends point to sustained interest in experiences, hybrid leisure activities, and entertainment-focused spending among Canadians. Services and experience-oriented businesses could benefit from aligning their strategies with these consumer preferences.
