Inflation woes have Canadians exasperated, fuming, and bracing

The high prices you are paying could stick around into 2023

Article content

Like the millions of Canadians stocking up on supplies or gassing up, Neil Bascombe can barely disguise his frustration.

Advertisement

Story continues below

Article content

Prices “keep going up and up, and then they relax a bit, and then it keeps going up — $1.50 for diesel even,” Bascombe said by the pumps.

With inflation running hot at an 18-year high, filling his Volkswagen with diesel is an exercise in disbelief.

“It’s crazy,” he fumed.

“They’re ripping us off. It’s a racketeering move. Gas, why does it go up on Thursday and Friday of every long weekend? It’s a racket and no one has the balls to call them on it.”

Toronto fruit stand owner Mario Aricci calls inflation as he sees it: “It’s ludicrous and it looks like there is no stopping it.”

Mario Aricci of Ponesse Foods at St. Lawrence Market said prices for his fruits and vegetables have skyrocketed recently and he has noticed a decline in clientele in the overall Market. Jack Boland/Toronto Sun
Mario Aricci of Ponesse Foods at St. Lawrence Market said prices for his fruits and vegetables have skyrocketed recently and he has noticed a decline in clientele in the overall Market. Jack Boland/Toronto Sun Photo by Jack Boland /Toronto Sun/Postmedia Network

Aricci said he can only raise prices so high before he risks bleeding customers to competitors.

“The profit margin shrinks, and if I increase my prices there are six other vendors in this building who sell the same product. I will lose. People will go shop somewhere else.”

Advertisement

Story continues below

Article content

On top of not yet fully recovering his pre-COVID number of customers, he said the lack of American tourists dents the bottom line.

Intense price pressure is filtering down the grocery aisle, and down restaurant menus.

“Beef and poultry, they’ve gone up 7.5%-10% in the last few months,” said Greg Batter, restaurant director at La Fenice on King St. W.

“After the last 18 months of lockdowns and dining restrictions, there’s only so much a restaurant can absorb and prices are going to rise. But I know our guests have felt the sticker shock everywhere too, so I’m doing my best to communicate to them how necessary these price increases are.”

We apologize, but this video has failed to load.

Garima Talwar Kapoor, director of policy and research at Maytree, an anti-poverty think-tank, said people with higher disposable income may simply forgo some restaurant outings if inflation remains high.

Advertisement

Story continues below

Article content

The choices would be more severe for those with low or fixed incomes whose earnings have stayed stagnant, she said, meaning their purchasing power is diminished as prices rise faster than wages.

“Their ability to be able to manage their disposable income becomes tighter and tighter, and you’re not forgoing a nice dinner out, but you’re actually forgoing a meal, you’re forgoing prescription medication and necessities like that,” Talwar Kapoor said.

September marked the sixth consecutive month that headline inflation has clocked in above the Bank of Canada’s target range of between 1% and 3%, something that hasn’t happened since a six-month stretch that ended in March 2003.

Among economic experts, there is much discussion about whether this inflationary bout is temporary — “transitory” — or has some staying power.

Advertisement

Story continues below

Article content

“The conclusion for us is not that inflation stays extremely high forever. We do think inflation will eventually normalize,” RBC chief economist Eric Lascelles said this week. “We think it will be a bit less hot over the next year, but I don’t think we’ll see a complete normalization in 2022. It’s going to take a bit longer than that…

“Energy costs are very much contributing to inflation right now. So oil has gone up a lot — it’s more than $80 a barrel.”

“Food prices were even stronger than the heady number we had pencilled in, with meat prices leading the way. That strength mirrors the gains seen in the U.S.,” wrote Royce Mendes of CIBC Capital Markets.

“The headline rate of inflation is also likely to remain above 4% for longer than we had previously envisioned, particularly with the recent run up in commodity prices and disappointing news on supply chains.”

Advertisement

Story continues below

Article content

Clogged supply chains have led to shortages and price spikes for things like shipping containers to electronic chips, driving up costs for everything from toys and cars to natural gas and trucking labour.

Mendes also wrote that the Bank of Canada will probably continue to view these price levels as temporary increases.

The traditional avenue to dampen inflation is raising interest rates, but that would burden Canadians with higher borrowing costs for things like credit cards, lines of credit and mortgages.
Bank of Canada governor Tiff Macklem has said a rate hike won’t happen until next year, but there are growing expectations the bank won’t wait that long, TD senior economist James Marple said.

“Liftoff may not come as early as markets are currently pricing, but the risks are certainly moving to sooner rather than later,” Marple wrote.

The Bank of Canada is scheduled to make its next interest-rate announcement on Oct. 27.

Here’s what happened in the provinces (previous month in brackets):

Newfoundland and Labrador: 4.4% (4.8%)

Prince Edward Island: 6.3% (6.3%)

Nova Scotia: 5.2% (5.1%)

New Brunswick: 5.1% (4.7%)

Quebec: 5.1% (4.4%)

Ontario: 4.4% (4.0%)

Manitoba: 4.7% (4.4%)

Saskatchewan: 3.3% (2.9%)

Alberta: 4.0% (4.7%)

British Columbia: 3.5% (3.5%)

    Advertisement

    Story continues below

    Comments

    Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

    Share:

    Share on facebook
    Facebook
    Share on twitter
    Twitter
    Share on pinterest
    Pinterest
    Share on linkedin
    LinkedIn
    On Key

    Related Posts

    On AIR

    Russtrat world

    USA on the eve of white revenge

    MOSCOW, 30 Nov 2021, RUSSTRAT Institute. During the presidency of Donald Trump, so many rules and even taboos have been broken in the American establishment