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lilley: trudeau's inflation means you're poorer than you think
inflation, the silent, thief took a bigger chunk of our incomes than we took in raises says statscan.
aug 20 2024
3 minute read
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you’re poorer than you think.
that’s the message from a statistics canada report that looked at the impact of inflation on after-tax family income. the report, issued monday, showed that median after-tax family income in 2022 rose by 2.5% to $60,800.
the bad news is inflation wiped out that out, meaning families were worse off.
“adjusted for an annual rate of inflation of 6.8%, the 2022 median family after-tax income was 4.0% lower than in 2021,” the report stated.
younger families headed by someone between the ages of 25-34 saw a bigger drop of 5.2% while lone-parent families in that age range saw their income drop by 8.5% in 2022. statscan hasn’t yet calculated how much inflation cost each of us in 2023.
inflation is the invisible thief robbing each of us of our purchasing power.
on tuesday, statscan reported that inflation had cooled, rising by just 2.5% in july . that’s more manageable than the peak of 8.1% in june 2022.
canadians are expected to feel good about inflation calming down. while most welcome it, we are also dealing with the impact of two years of higher than acceptable inflation rates.
while statscan says we are at just 2.5% for last month, that’s still an increase in prices. inflation started rising above the 2-3% range targeted by the bank of canada in april 2021 and didn’t return to that range until this year.
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that’s left canadians paying grocery prices that are almost 25% higher than when inflation started to rise. the basket of groceries that cost you $100 in early 2021 costs $125 now.
that’s hard on the wallet and those prices won’t be coming back down any time soon.
in march 2021, before inflation took off, the average price of a litre of regular gasoline across canada was $1.25 according to statscan. last month, the average national price was $1.66, an increase of 33% over the past three years.
the price to rent a home is 8.5% higher in canada than it was a year earlier which of course was higher than the year before, which was higher than the year before.
the trudeau government can cite how canada is doing according to the latest study from the international monetary fund, the organization for economic co-operation and development or the world bank. it doesn’t matter. most canadians never deal with the imf, oecd or world bank.
what canadians do deal with is the price at the pump, the cost of a loaf of bread. they see that the meat, the fruit and the vegetables they look to put on the table each day cost more.
this is why justin trudeau’s comment early in the 2021 election that he doesn’t think about monetary policy was so tone deaf. as i wrote at the time, not thinking about monetary policy means not thinking about the impact of government decisions on the average family budget including what they pay to feed and house themselves.
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trudeau’s out-of-control spending was a major contributing factor to the inflation in this country. he was warned in the middle of all of this that if he didn’t control spending, the bank of canada would have to raise rates higher than necessary to bring inflation under control.
that’s exactly what happened.
canadians have paid more and watched their income and purchasing power shrink due to inflation that was driven in part by trudeau’s spending. then they felt the impact of the interest rate hikes on mortgages and lines of credit.
now, with inflation cooling, we can expect a rate cut soon.
none of that will take away from the fact that we have all lost purchasing power over the past several years thanks to the silent thief, aided and abetted by the trudeau government.
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