EN 
By Abbey Xu and Rachel Battaglia
September spending snapshot: RBC cardholder spending regained momentum in September after a softer August, showing resilience after a surprisingly strong Q2 when international trade uncertainty was high. RBC’s core retail sales—which excludes volatile components such as autos and gas (like Statistics Canada’s core measure)—grew 0.7% on a three-month rolling average basis in September, up from 0.2% in August.
The slowdown in August prevented Q3 from matching Q2’s robust performance. This deceleration is consistent with our base case forecast for household consumption to grow slower in the rest of 2025, but enough to enable modest gross domestic product expansion in Q3 despite weakness in the industrial sector.
Q3 spending holds up despite broad moderation
Overall Q3 performance cooled with the slowdown led in part by continued price declines in gas spending as well as softer spending across several categories.
Dining spending grew by a smaller 1.6% in Q3 compared to 7.3% in Q2. Grocery and clothing spending also eased, growing at roughly half the pace from Q2.
Still, underlying positive momentum remained intact. A notable rebound in travel spending and sustained strength in arts and entertainment partially offset moderating growth in other categories.
Per capita spending shows moderation with aggregate trend
Per capita analysis revealed a similar deceleration pattern, suggesting population growth isn’t driving the moderation in RBC cardholder spending.
Canada’s population growth slowed nearly to zero on a seasonally adjusted, annualized basis in Q3. This marks a significant shift from a year ago when population growth was a robust annualized 2.25%. At that time, rapid population growth was masking underlying weakness in the consumer by keeping aggregate spending on the rise.
With that demographic tailwind now largely disappearing, individual spending trends will have greater influence on Canadian GDP. Per capita spending slowed to 1.5% in Q3 from 2.5% in Q2, mirroring the aggregate decline from 2.4% to 1.3%.
Spotlight on spending: Discretionary and essential purchases still rising
Strength in September’s cardholder spending was broad across discretionary services, goods, and essentials, highlighting resilient consumer demand.
Discretionary services maintained the lead on a three-month rolling average despite less spending in dining.
Similar to the aggregate trend, all three major spending categories saw slower growth in Q3.
Sentiment stabilizing but still fragile
There was a gradual recovery in consumer confidence in September, but a divergence in actual household spending and sentiment persists.
The Conference Board of Canada’s Index of Consumer Confidence rose 4.8% in September from the end of Q2, reflecting recovering confidence despite ongoing economic uncertainties. The latest gain wasn’t enough to fully reverse August’s dip, but sentiment remains on firmer footing compared to earlier in the year.
Regional trends: Ontario outperforms as momentum fades elsewhere
Quarterly spending growth decelerated across most provinces in Q3 with Ontario the notable exception.
Cardholder spending in Canada’s largest province accelerated to 2.4% from 1.9% in Q2—well above the national average. The strong performance contrasted with neighboring Quebec where RBC cardholder spending grew just 0.6%—less than half the national pace. Ontario’s gain was relatively broad across categories with the exception of spending at gas stations that continued to contract.
Prince Edward Island (4.4%) and Nova Scotia (3.4%) also notched above the national average, but saw momentum slow from Q2. Strength was fuelled by a rebound in travel spending and outsized growth in entertainment and art. Both provinces hosted music festivals that drew in many visitors.
Saskatchewan was alone with a quarterly decline with spending falling 0.6% with drops in entertainment, arts, and travel after an overall strong Q2.
About the Authors
Abbey Xu is an economist at RBC. She is a member of the macroeconomic analysis group, focusing on macroeconomic forecasting models and providing timely analysis and updates on economic trends.
Rachel Battaglia is an economist at RBC, providing analysis and forecasts for consumer spending trends and provincial economies.
By Carrie Freestone
RBC’s consumer spending tracking report uses RBC Data & Analytics’ proprietary database of anonymized card transactions by Canadian clients. The data are an accounting of merchant transactions that are divided into various spending categories covering tens of millions of weekly card transactions worth billions of dollars each week. Transactions, both in person and online, are classified into 11 broad spending groups: Dining, Education, Finances, Groceries, Health, Household, Shopping, Transport, Travel, Utilities, and Other. Within each group, the data are further classified: for example, shopping covers merchants classified as clothing stores, hobby shops, electronics stores, and jewelers, among others. We exclude purely financial transactions such as cash advances and insurance from spending.
We examined changes in the value of all transactions in these areas using a 7 day rolling sample starting January 1st of each year that is indexed to pre-covid levels which are calculated as the average spending for the month of February 2020. To examine the impact of seasonal factors, we also show each’s year spending profile which depicts monthly trends in spending. Online spending volumes are estimated based on the presence of an RBC card at the time of the authorization.
Protecting your privacy and safeguarding your personal information is a cornerstone of our organizational ethics and values and will always be one of our highest priorities. The underlying data for this analysis was aggregated based on transaction date, region and merchant category, and cannot be used to identify any individual client or merchant. For additional information please visit www.rbc.com/privacy.
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