News Releases

As an economist, one of the most common questions I get, regardless of the industry, is deceptively simple: where is the economy heading, and what does that mean for day-to-day business decisions?

For those operating in the direct selling industry, that question matters a lot right now. This sector is closely tied to consumer confidence, household cash flow, and the willingness of people to commit discretionary dollars or take on flexible, entrepreneurial activity. All those elements are showing signs of strain as we move into 2026.

The past year was defined by shifting trade relationships, policy uncertainty, and persistent cost pressures. Yet despite the noise, Canadian consumer spending held up better than many expected in 2025. Successive rate cuts from the Bank of Canada helped stabilize borrowing costs, and households largely managed to stay afloat, even during periods of elevated uncertainty. The feared collapse in consumption never fully materialized.

That picture is now changing. As 2026 began, momentum softened. Consumers did not abruptly pull back, but confidence has faded a little. Measures of consumer sentiment have weakened, and indicators tied to household financial stress are becoming harder to ignore. The latest MNP Debt Index shows that while households are not in crisis mode, debt servicing pressures remain elevated and financial resilience is materially thinner than it was even a few years ago.

This stress is increasingly visible in the data. In 2025, national debt delinquency rates rose by over 14 percent compared to 2024, with sharper increases among younger working-age Canadians. Delinquencies climbed by roughly 21 percent among those aged 26 to 35, and by about 16 percent for the 36 to 45 age group. These cohorts are central to the direct selling ecosystem, both as consumers and as participants seeking supplemental or flexible income.

At the same time, consumer expectations around interest rates remain misaligned with reality. Roughly 64 percent of Canadians say they urgently need rates to come down further, yet the Bank of Canada has been clear that its policy rate, currently at 2.25 percent, is likely to remain in place in the near term due to inflationary risks and economic uncertainty. That disconnect feeds anxiety and hesitation in household decision-making.

Income trends are not offering much relief. Deloitte’s 2026 outlook shows that annual wage growth has stagnated or declined over the past three years, reinforcing the feeling among many Canadians that they are earning less purchasing power while paying more for nearly everything. Housing, groceries, insurance, utilities, and debt payments are all competing for the same limited pool of household dollars.

When consumers feel stretched, behaviour changes. They become more selective, more cautious, and far less tolerant of complexity or surprises. They delay purchases, reassess subscriptions, and scrutinize value much more closely. Demand does not disappear, but it becomes harder to earn.

For the direct selling industry, this environment places a premium on trust. Personal relationships, transparency around pricing, and a clear articulation of value matter more when consumers feel financially compressed. People gravitate toward sellers and brands that respect their constraints and help them navigate uncertainty rather than gloss over it.

There is also an opportunity embedded in this moment. When the broader economic outlook feels unstable, consumers often lean toward human connections over impersonal transactions. Direct selling is fundamentally relational, and those who emphasize education, credibility, and long-term relationships will be better positioned than those who assume consumers will simply adapt to higher costs as the new normal. 

Furthermore, Canadians often turn to direct selling as a source of supplemental income during tough economic times. While there are now more competing opportunities in the “side-hustle” economy than ever before, 2026 does provide the chance for companies with compelling products and compensation plans to engage a motivated consultant group. 

2026 is shaping up to be less about volume and more about confidence. Businesses that understand the emotional and financial backdrop shaping consumer and entrepreneur behaviour will be the ones best equipped to remain resilient in a slower, more cautious economic environment.