Canadians across the country will be receiving their tax refund this month, but most younger Canadians are using it to save rather than splurging this spring, data from TD Bank shows.

Nearly half (47 per cent) of Canadians expecting a refund this year say they will save the money for a rainy day, rather than splurge it on discretionary spending, a TD survey released Monday shows.

For Gen Z Canadians, that number has more than doubled from 30 per cent in 2025 to 63 per cent this year, data show.

Gen Z Canadians are also more than twice as likely to invest this year (33 per cent) compared to last year (15 per cent) and also more likely than this year’s national average (25 per cent).

“More Canadians are planning to save this year, more Canadians are planning to invest this year as well, and the discretionary spend is trailing far behind,” said Manish Jain, vice president of personal savings and investing at TD Bank.

“Younger Canadians, particularly Gen Z, are really leading the way here,” he added.

Climbing debt and the cost of living are defining plans for many, with 36 per cent of all respondents saying they’ll use their refunds to pay down debt, compared to 23 per cent last year. One in four (25 per cent) said they will use it to cover daily expenses, up from 15 per cent last year.

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Nearly half (44 per cent) of those who are not investing this year say they want to, but don’t have the funds needed to kickstart investments, Jain said, adding that nearly two-thirds of Gen Z respondents also say they don’t know enough about which investment products they can buy.

But those who are using their tax refunds to invest this year are using it as a launch pad for building more consistent habits.

“Our Gen Z respondents are planning to save more consistently. It’s not just about the one-time refund, but consistent investing,” he added.

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A 2025 research report by JPMorganChase shows that as homeownership feels out of reach for young people in the U.S., they are turning their money towards investing in stocks. Lower-income and younger people have increased their retail investment activity more than higher-income people since the start of the pandemic, the report shows.

People are also entering investment markets earlier. In 2015, the percent of Americans aged 25 with investment accounts was six per cent. By 2024, that number jumped to 37 per cent.

The same trends are bearing out in Canada, Jain said.

“Younger Canadians are interested in broadening the type of investments that they invest in. Their investment choices include investments like ETFs and individual stocks compared to the rest that are more focused on traditional investments like the GICs and mutual funds,” he added.

For young Canadians, too, homeownership has been slipping out of reach as the starter home is disappearing from the housing market, a report by the University of Ottawa’s Missing Middle Initiative showed in February.

While incomes in Canada have risen 76 per cent since 2004, the price of a new home at the lower end of the market has risen by 265 per cent, the analysis said.

Canadians are relying more and more on tax refunds as a lifeline, recent data shows.

An EQ Bank survey released in April shows more than one-third (36 per cent) of Canadians say they are relying on their tax refund more this year than last year, with the figure jumping to more than four in 10 (42 per cent) among younger Canadians aged 18-34.

Women (41 per cent) are more likely than men (32 per cent) to say they are relying on their refund for expenses.

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