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What to Do with Your Tax Refund: 5 Smart Moves for Canadians

  Tax Season · Personal Finance By MoneySavings.ca Editorial Team • May 7, 2026 • 7 min read Tax season is wrapping up across Canada, and for millions of Canadians, that means a refund cheque — or a direct deposit — is on its way. The average Canadian tax refund hovers around $1,800. That's real money. The question is: what's the smartest thing you can do with it? It's tempting to treat a tax refund like "found money" and splurge. But here's the truth — that refund was your money all along. The government was just holding it for you, interest-free. So before it quietly disappears into day-to-day spending, let's look at five moves that will make it work harder for you. $1,800 The average Canadian tax refund — enough to make a meaningful dent in debt, pad an emergency fund, or kick-start your TFSA for the year. 1 Pay Down High-Interest Debt First If you're carrying a balance on a credit card, this should be your very first call. Most Canadian credit car...
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Trade Tensions Stall Canada’s Growth in Q2 2025

                                            A railway grain terminal in Alberta. 

Canada’s economy contracted sharply in the second quarter of 2025, underscoring the toll that escalating trade tensions have taken on the country’s growth. Statistics Canada reported a 1.6% annualized decline in real GDP, far steeper than the 0.5% drop economists had anticipated.

The slowdown was most pronounced in the spring, when tariff uncertainty disrupted exports and dampened business investment. June saw a 0.1% month-over-month GDP dip, while a preliminary estimate for July suggested only a modest 0.1% rebound.

The Bank of Canada had already projected a significant contraction for the quarter, citing the drag from U.S. tariffs and weaker global demand. Analysts note that further softness in the labour market could influence the central bank’s next interest rate decision.

The downturn follows a surprisingly strong first quarter, when GDP grew 2.2% as companies rushed to ship goods ahead of tariff deadlines. With trade negotiations still unresolved, economists warn that uncertainty could continue to weigh on Canada’s economic momentum into the second half of the year.

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