More Canadians Rely on Tax Refunds, Survey Shows

What people plan to do with their tax refund offers a small but telling snapshot of the broader economy. EQ Bank’s recent survey on how Canadians are approaching tax season provides insight into household priorities and financial pressures this year.

After several years of elevated inflation and a higher cost of living, many households are feeling the strain. The survey responses make it clear that tax refunds are increasingly being treated as a pragmatic budget tool rather than money for discretionary spending.

Tax refunds are becoming a financial lifeline for Canadians

When household finances are comfortable, refunds often go toward travel, entertainment, or non-essential purchases. But when budgets are stretched, tax refunds are redirected to day-to-day needs and financial recovery. EQ Bank’s survey found that only 9% of respondents plan to spend their refund on non-essential purchases, underscoring the cautious mindset many Canadians have adopted.

More than a third of respondents (36%) say they are relying more on this year’s tax refund than in previous years. That reliance is even greater among younger Canadians: 42% of those aged 18 to 34 report depending more on their refund, which may reflect smaller emergency savings or tighter budgets among younger households.

The survey also highlights gender differences in how refunds are used: 41% of women said they are more likely to rely on their refund to cover everyday expenses, compared with 32% of men. This pattern may relate to persistent wage gaps—on average women earn less than men across many sectors—putting more pressure on some households to use refunds as a short-term income supplement. The gap is often wider for racialized and Indigenous women.

So how are Canadians planning to allocate their refunds? With discretionary spending largely sidelined, the most common uses reported were paying down debt (28%), contributing to retirement accounts like RRSPs (28%), holding the money in cash (26%), and covering everyday expenses (22%). These choices suggest refunds are being used to shore up financial stability rather than fund luxuries.

In short, many Canadians are treating this year’s tax refunds as a practical resource to keep household finances afloat.

A tax credit aimed at easing everyday costs

The goods and services tax (GST) or harmonized sales tax (HST) you pay on everyday purchases can add up quickly. To help offset those costs, the federal government historically offered the GST/HST credit to support lower- and middle-income Canadians facing rising living expenses.

If you filed your taxes and qualify, you may receive the credit by direct deposit or cheque every three months. In EQ Bank’s survey, nearly half of respondents (46%) believed they would be eligible for the GST/HST credit.

Asked how they would use that credit, 48% said it would go toward everyday expenses, while 32% planned to save it and 30% intended to use it to pay down debt. Another 18% said they would place the funds into an emergency savings account—choices that again point to prioritizing financial security.

The survey was completed before major policy changes were announced in early 2026. In response to global economic uncertainty and rising costs, Parliament introduced the Canada Groceries and Essentials Benefit Act, which replaces the GST/HST credit. Under this legislation, eligible Canadians are set to receive:

• A one-time bonus payment in spring 2026 equal to a 50% increase in the annual 2025–26 value of the GST credit
• A 25% increase in the Canada Groceries and Essentials Benefit for five years, beginning in July 2026

Those who expected the GST/HST credit can likely expect the one-time bonus by June, followed by the enhanced benefit starting in July. The larger, more frequent payments are intended to help households better manage everyday costs, build savings, and reduce debt.

The bottom line

The last several years have tested household finances across the country, and the survey makes clear that many Canadians are responding by treating tax refunds as a practical financial tool. Prioritizing debt repayment, bolstering emergency savings, and contributing to retirement accounts are common, sensible responses that can build resilience and reduce vulnerability to future shocks.

*Note: Respondents could select multiple intended uses for their refund, so percentages may sum to more than 100%.

Read more about taxes:

• How to fill out a personal tax return
• Smart strategies to maximize your tax return
• Claiming your spouse and dependents on your tax return