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Despite persistent inflation, 47% of Ontarians have a larger holiday spending budget than last year: survey

Dec. 15, 2022
6 mins
A mother reaches for a holiday ornament while holding her young daughter

High inflation has made its mark in the economy, increasing the price of staple gifts in North America like jewelry by 31%, electronics by 11%, and toys by 10.5% year-over-year. The cost of a holiday dinner has even risen 12% since 2021.

Though price increases are being felt by all Canadians, average disposable incomes have grown for some and decreased for others this year, making the choice to save or spend this holiday season a personal one.

While Canada as a whole may be planning to cut back on holiday spending this year, some regions of Ontario may be an exception. A recent RATESDOTCA email survey found that 47% of Ontario respondents are spending a larger amount on the holidays than they did last year.

Regardless of whether you plan to splurge or conserve, avoiding high-interest debt is crucial as we ring in 2023.

An infographic that shows how Ontarians plan to afford their holiday spending in 2022, including maximum budgets and debt repayment plans.

Almost half of Ontarians have larger holiday budgets than last year, with most spending up to $1,000

Although prices of daily essential consumables like food and gasoline remain high, the majority of Ontarians surveyed are allotting more money for their holiday budgets in 2022 than they did in 2021 (47%).

“Last year, many Canadians were still worried about the pandemic so social gatherings were limited,” says Barry Choi, Toronto-based personal finance and travel expert. “With pretty much all restrictions lifted, it's no surprise that people are ready to spend more this year since they'll be seeing more people.”

A significant portion, however, are also spending less (31%), while some don’t have a budget mapped out at all, despite typically having one (11%).

For those who do have holiday budgets, maximum spending caps vary, with the most common budgets reaching up to $1,000 (35%) and up to $500 (25%), while smaller percentages allow for budgets up to $5,000 (9%) and more than $5,000 (3%).

A number of financial factors can determine whether someone can adjust to higher price points, especially during the holidays. For example, a shopper with multiple streams of income, safe investments, and low-interest debt might have more flexibility than someone with one fixed income and stagnant, high-interest debt. Wherever you fall on the spectrum, budgeting and recording your spending is recommended.

“Tracking things along the way, which would include things such as presents, transportation, clothes, etc., will help you stay accountable,” says Choi. “If you're getting close to your maximum budget, you may need to cut back or learn to say no to some events.”

Many are opting for gift cards to make tracking their spending easier this year (which is also a good way to curb inflated prices).

Overall, the survey shows that spending is geared towards gifts, primarily for friends (20%), adult family members (20%), and children (18%), with less focus on travel (6%) and holiday dinners (10%). It appears many Ontarians are simply prioritizing their spending rather than cutting it back.

More than half of Ontarians have up to $5,000 in debt, primarily on credit cards

Most Ontarians currently have debt ranging between $0 and $5,000 (52%). However, a substantial percentage of the province (19%) has a high amount of debt between $20,000 and $50,000, while the fewest have moderate debt from $5,001 to $10,000 (10%) and $10,001 to $20,000 (12%).

Of this debt, most is on credit cards (55%) and standard lines of credit (22%), as opposed to loans (19%) or home equity lines of credit (HELOC) (4%).

One way to minimize any added debt you take on during the holidays is splitting the cost of gifts using online money transfer apps, a solution Gen Z is helping normalize this year.

However, all debt holders, particularly those with long-standing debt, should take the time to review the details of their account. Paying attention to factors like interest rates and credit card rewards programs can help you navigate debt more easily.

For example, comparing the best credit cards in Canada can help you discover cards that offer redeemable points curated to the types of purchases you make most often or that have a lower interest rate to transfer your high-interest debt over to. You can even help improve your credit score just by using the right credit card.

Most plan to fund holiday spending with income while still making regular debt payments

The majority of Ontario respondents are using their income to afford holiday expenses this year (46%), while 19% will be dipping into their savings, 15% will rack up credit card debt, and another 15% will trim down on frivolous expenses like dining out and entertainment. Only 1% are using a HELOC or line of credit for holiday spending, a reassuring percentage given high interest rates.

In line with this pattern, most report that they can pay off the debt they have. Approximately 82% make regular payments toward their debt, while only 8% have no repayment plan and 4% are only paying interest (a worst-case scenario).

Whether it’s affordable or not, most Ontarians are committed to holiday spending this year. But for the portion of those who have no spending plan, debt can easily rack up quicker than in past years given the Bank of Canada’s continuous interest rate hikes. So be sure to keep your budget in check, set out an amount from the start, and stick to it.


The email survey was conducted using the Ontario RATESDOTCA email database from November 12-16, 2022. In total, 624 Ontario respondents participated. Most responses (17%) came from participants in Toronto.

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Michelle Bates

Editor and Writer

Michelle Bates is an editor and writer in the personal finance space. She has seven years of content writing experience.

She has a Bachelor of Arts (Honours) degree from Queen's University in English Literature and Sociology along with a Publishing - Book, Magazine and Electronic graduate certificate from Centennial College. Michelle specializes in personal finance content, including mortgages, home, auto, and travel insurance, and credit cards. Her work has been covered by notable Canadian news sources like the Financial Post, the Globe and Mail, CTV News, and Narcity.

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