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
BREAKING Iran fires air defence batteries in provinces as explosions heard near Isfahan
Iran fired air defence batteries early Friday morning as explosions could be heard near a major air base near Isfahan, raising fears of a possible Israeli strike following Tehran's unprecedented drone-and-missile assault on the country.
American millionaire Jonathan Lehrer denied bail after being charged with killing Canadian couple
American millionaire Jonathan Lehrer, one of two men charged in the killings of a Canadian couple in Dominica, has been denied bail.
Nearly half of China's major cities are sinking, researchers say
Nearly half of China's major cities are suffering 'moderate to severe' levels of subsidence, putting millions at risk of flooding especially as sea levels rise.
Prince Harry formally confirms he is now a U.S. resident
Prince Harry, the son of King Charles III and fifth in line to the British throne, has formally confirmed he is now a U.S. resident.
Judge says 'no evidence fully supports' murder case against Umar Zameer as jury starts deliberations
The judge presiding over the trial of a man accused of fatally running over a Toronto police officer is telling jurors the possible verdicts they may reach based on the evidence in the case.
Health Canada to change sperm donor screening rules for men who have sex with men
Health Canada will change its longstanding policy restricting gay and bisexual men from donating to sperm banks in Canada, CTV News has learned. The federal health agency has adopted a revised directive removing the ban on gay, bisexual and other men who have sex with men, effective May 8.
Colin Jost names one celebrity who is great at hosting 'Saturday Night Live'
Colin Jost, who co-anchors Saturday Night Live's 'Weekend Update,' revealed who he thinks is one of the best hosts on the show.
Sports columnist apologizes for 'oafish' comments directed at Caitlin Clark. The controversy isn't over
A male columnist has apologized for a cringeworthy moment during former University of Iowa superstar and college basketball's highest scorer Caitlin Clark's first news conference as an Indiana Fever player.
'Shopaholic' author Sophie Kinsella reveals brain cancer diagnosis
Sophie Kinsella, the best-selling author behind the 'Shopaholic' book series, has revealed that she is receiving treatment for brain cancer.