There’s some good news for the Canadian economy, as consumer spending in the country grew by 4.19% in the fourth quarter of 2016 on a year-over-year basis, according to the Moneris Metrics Quarterly Report released by Moneris Solutions Corporation.

Following spending growth of 6.24% in Q1, 5.53% in Q2, and 4.77% in Q3, the percentage of growth continued to shrink in Q4, ending the year with a positive, but comparatively smaller increase.

“We observed increases in consumer spending throughout every quarter of 2016, but that growth declined slowly and steadily over the course of the year,” says Angela Brown, President and CEO of Moneris. “As we enter 2017, we expect a trend of modest growth to continue as Canadian policy-makers react to a changing global landscape and broader challenges present in the Canadian economy.”

Compared to 2015, consumer spending this year rose by 2.95% in October, 5.34% in November and 4.24% in December. Regionally, Ontario and British Columbia led the country’s spending growth this quarter, posting increases of 6.24% and 5.87%, respectively. Spending was down 2.04% year-over-year in Alberta, marking the fifth consecutive quarterly decrease for the province, while Newfoundland posted its first spending decrease since Q2 2014, declining 1.66% over the same period in 2015.

The overall slowdown in consumer spending growth is consistent with other recent economic indicators, with Statistics Canada reporting a decline in Canada’s GDP, flat average weekly earnings, and low growth in retail sales, all during the October time period.

Share of spending during the fourth quarter was more heavily weighted toward credit cards. Credit card spending increased by 5.68%, representing 63.8% of transactions. Spending on debit cards rose by 1.67%, representing 36.2% of transactions.

With regards to the holidays, Black Friday sales soared while Boxing Day lost its lustre. Consumer spending on Black Friday, the Friday after the U.S. Thanksgiving holiday, was up 5.91% over 2015 in Canada. By contrast, Boxing Day shopping was down 4.58% year-over-year, suggesting that Canadians are changing their holiday shopping patterns as Canadian retailers offer more Black Friday deals and discounts.

For the fourth year in a row, December 23 was Canada’s busiest shopping day of the year with an increase of 11.32% in the number of transactions processed over the previous year, followed by Black Friday and Boxing Day. However, Black Friday was the biggest day of 2016 in terms of overall sales volumes.

Spending on foreign cards increased 13.44% year-over-year, with the low dollar continuing to provide tourists and cross-border shoppers with a reason to make purchases in Canada. As in other quarters, cards from the U.S. drove the highest foreign spending volumes during the period, with an increase of 13.77% year over year.

China and Australia were the second and third highest contributors to foreign spending growth by volume during the quarter, with increases of 16.88% and 24.04%, respectively.

Contactless, or tap-and-pay, transactions remained a popular choice for Canadians during the fourth quarter of 2016, boasting an impressive 120.73% increase in dollar volume and a 73.74% increase in total number of transactions compared to the fourth quarter of last year.

In terms of the share of transactions by payment method, contactless accounted for 35.48% of all transactions made in Canada during the quarter, compared to 22.22% during the same period in 2015. That number increased on Black Friday, when almost half (47.11%) of all transactions were “tapped” transactions, up from 30.04% in 2015.

Moneris is one of Canada’s largest processors of debit and credit payments.

Source: WIFI HIFI

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