Inflation fallout: Albertans should brace for impending price hikes coming at breakneck speed
Nationwide inflation hit a 30-year high at the end of 2021. Economists are warning that the speed of price increases could increase, with many predicting an interest rate hike from the central bank the end of January.
Financial educator Mark Kalinowski of the non-profit Credit Counselling Society sees firsthand the effect inflation us having on his clients
"People's incomes don't keep up with the rising cost of goods. So, especially when we're talking about middle class or lower middle income Canadians, they struggled to maintain their lifestyle, as the things that they need cost more and more.
"Gas is more expensive, the cost of groceries is through the roof, and they struggle to start balancing out those things they need, and still have some of those things they want."
He says while interest rate hikes, like the one expected this month, tend to put downward pressure on inflation, they do not ease the cash crunch for many Canadians
"People will struggle definitely as interest rates rise, and we're going to see Canadians have to seek alternative solutions to just try to make those minimum payments on their credit card," said Kalinowski. "They're not going to get anywhere. It's going to cost more to pay the mortgage on your house. If you're buying a new car, chances are you're not going to get that zero per cent interest rate anymore, maybe you're going to pay a one per cent interest rate. But, again, that's money out of your pockets."
Statistics Canada reported Wednesday that inflation climbed to 4.8 per cent in December, a rate that hasn't been seen in Canada since September 1991.
While it seems like everything costs more some items jumped considerably.
The price for groceries climbed year-over-year by 5.7 per cent; the largest jump in a decade. Housing costs rose by 9.3 per cent compared to a year earlier. It's even become more expensive to put furniture in that home. Anyone in the market for a new appliance will have noticed the price for those items has risen by 8.9 per cent. That marks the biggest jump in those costs since June 1982.
And of course who hasn't noticed the spike in the price of gas? Even if you don't drive you’ve seen the numbers climbing on the signs. Gasoline prices leapt 33.3 per cent year-over-year from December 2020 to 2021.
According to Statistics Canada, even stripping out the volatile gasoline prices, the consumer price index climbed by four per cent during 2021.
The year-over-year change in prices in December outpaced gains in wages over the same stretch. Statistics Canada said wages rose 2.6 per cent between December 2021 and last month, resulting in a drop in the purchasing power of Canadians.
ATB deputy chief economist Rob Roach says he expects prices to keep climbing into, at least, much later this year.
"Our expectation is that is going to stay high well into 2022 for the next few months, at least. It's going to take some time for those supply chain disruptions we've been hearing about, and the price of oil looks like it's going to stay high. So you put those two things together, there's not a lot of reasons for inflation to come down," said Roach.
"We're probably stuck with these price increases for the next few months, at least. We do expect the Bank of Canada and other central banks around the world to raise interest rates, which should start to help bring down the inflation. But that's also going to take time to work its way through the system."
Roach expects it will be into the second half of 2022 before inflation starts to recede. Even then he warns prices will only stop rising quickly, and consumers shouldn't expect them to drop.
"It's still going to stretch a lot of Albertans, their budgets, quite dramatically with the price increases and with rising interest rates. But at least we're not back to the '70s, for example, (where) we had rates of inflation much, much higher than where we're experiencing and created all kinds of problems."
CTVNews.ca Top Stories
How quietly promised law changes in the 2024 federal budget could impact your day-to-day life
The 2024 federal budget released last week includes numerous big spending promises that have garnered headlines. But, tucked into the 416-page document are also series of smaller items, such as promising to amend the law regarding infant formula and to force banks to label government rebates, that you may have missed.
Which foods have the most plastics? You may be surprised
'How much plastic will you have for dinner, sir? And you, ma'am?' While that may seem like a line from a satirical skit on Saturday Night Live, research is showing it's much too close to reality.
opinion I've been a criminal attorney for decades. Here's what I think about the case against Trump
Joey Jackson, a criminal defence attorney and a legal analyst for CNN, outlines what he thinks about the criminal case against Donald Trump in the 'hush money trial.'
$3.8M home in B.C.'s Okanagan has steel shell for extra wildfire protection
A home in B.C.'s Okanagan that features a weathering steel shell designed to provide some protection against wildfires has been listed for sale at $3.8 million.
Diver pinned under water by an alligator figured he had choice. Lose his arm or lose his life
An alligator attacked a diver on April 15 as he surfaced from his dive, nearly out of air. His tank emptied with the gator's jaws crushing the arm he put up in defence.
Psychologist becomes first person in Peru to die by euthanasia after fighting in court for years
A Peruvian psychologist who suffered from an incurable disease that weakened her muscles and had her confined to her bed for several years, died by euthanasia, her lawyer said Monday, becoming the first person in the country to obtain the right to die with medical assistance.
Mystery surrounds giant custom Canucks jerseys worn by Lions Gate Bridge statues
The giant stone statues guarding the Lions Gate Bridge have been dressed in custom Vancouver Canucks jerseys as the NHL playoffs get underway.
Celebrity designer sentenced to 18 months in prison for smuggling crocodile handbags
A leading fashion designer whose accessories were used by celebrities from Britney Spears to the cast of the 'Sex and the City' TV series was sentenced Monday to 18 months in prison after pleading guilty in Miami federal court on charges of smuggling crocodile handbags from her native Colombia.
Wildfire leads to evacuation order issued for northeast Alberta community
An evacuation order was issued on Monday afternoon for homes in the area of Cold Lake First Nation.