Consumer spending for the 2008 holiday season in Canada is set to match or outperform last year’s levels, according to professional services firm Deloitte.

A Deloitte survey of almost 3,000 Canadians found that 53% plan to spend the same amount on holiday shopping as they did in 2007, and 40% report that they will spend less this year.

“It may sound strange, but we view these results positively and believe that Canadian retail sales this year will be higher than last year,” said Brent Houlden, Deloitte’s national practice leader for retail in a statement. “Consumers always spend more than they intend during the holiday season, and with Canadians currently enjoying lower gas prices they’ll have a little more cash in their wallets.”

Shoppers in the Greater Vancouver and Toronto areas are the most likely to decrease holiday spending this year, at 45% and 46% respectively.

Retailers will have to chop prices to draw shoppers since consumers will be hunting for bargains, Houlden said. Specifically, 83% of consumers are planning to buy more items on sale, and that figure rises to 86% in Atlantic Canada and 88% in the Greater Toronto Area.

Fewer shoppers will head south of the border for gifts, the survey found. Thanks to the lower value of the loonie, 41% of shoppers plan to shop in the United States this year, down from 64% in 2007.

“Compared to last year, when the Canadian dollar was at, or above par leading up to the holiday season, we expect to see a significantly lower number of Canadians spending their holiday budget south of the border this year, which will help out our Canadian retailers,” said Houlden.

Online purchases could drop in popularity this year too, with 63% of respondents reporting that they do not plan to make any holiday purchases on the web.

The survey also found that Canadians are willing to open their wallets for the environment this year. More than half of respondents said they would spend more for an environmentally friendly gift; roughly half of those respondents would pay no more than 10% extra.

The number one gift this year is set to be gift cards, according to the survey, with almost two-thirds of respondents planning to purchase them. Other top gifts include clothing, books, food and liquor.

IE