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It will be a Christmas of scrimping and bargain hunting.

As the financial crisis deepens and uncertainty about the economy grows, many Canadians say they're going to significantly cut back their holiday spending compared with last year, according to a new survey by Deloitte & Touche, a financial advisory firm.

"This year, I think it will be very much a focus on making do with less," said Bruce Cran, president of the Consumers' Association of Canada.

About 40 per cent of those surveyed said they plan to reduce what they spend this holiday season, compared with just 25 per cent who said that last year. People living in Vancouver and Toronto were more likely than other Canadians to report plans to cut back, with 45 and 46 per cent of those surveyed saying they will reduce their holiday spending.

But for consumers, there is a silver lining. Retailers caught with excess inventory will be slashing prices and offering major deals to those who make it into the stores, says the survey, released yesterday.

"It might be the best price you get for the rest of your life. It could be that kind of season," said Brent Houlden, national retail practice leader at Deloitte & Touche. "This isn't a nice environment, but it's an opportunity. It's opportunistic buying by consumers."

According to the survey, in addition to watching their wallets, a majority of Canadian shoppers will be sifting through bargain bins and checking flyers for discounts.

More than 80 per cent of those surveyed said they will buy more goods on sale this year - a number that jumps to 86 per cent in Atlantic Canada and 88 per cent in the Toronto region.

Retailers have been bracing themselves for a slower shopping season and the possibility of a drop in sales, said Peter Woolford, vice-president of policy development and research at the Retail Council of Canada.

"Canadians channel their inner Scrooge and they get careful," Mr. Woolford said. "Their intentions are obviously careful and cautious at this point, and that's a classic Canadian response to uncertain times."

Signs that Canadians indeed have something to worry about keep popping up. A Canadian Real Estate Association report released this week predicts average home values will drop below the $300,000 threshold next year, making many homeowners less wealthy than they may have thought. Also this week, electronics retailer Circuit City announced it is seeking bankruptcy protection in Canada and the United States. Last week, General Motors of Canada Ltd. said it will lay off 500 workers in Canada, with further cuts expected.

However, some experts predict that Canadians will still overindulge and spend more than planned during the holiday season.

"Even in very good years, [retailers] get a very significant portion of consumers saying they will spend less," Mr. Woolford said. "It's the retailers' job to persuade the customer to shop in their stores. They make their living by being successful at that."

In addition, major sales are likely to draw consumers into stores and keep them shopping for more, Mr. Houlden said.

"We're not that pessimistic about this Christmas," Mr. Houlden said. "We always get carried away with the spirit of the season."

But Mr. Cran said that view may be far too optimistic. He predicts the economic crisis will take a real toll on Canadian families this year - one that will be reflected under the Christmas tree.

"In my living memory, I have never seen less confidence or a tougher situation than we're looking at at that moment," he said.