It’s the holiday season and what better way is there than to celebrate with a box of Nanaimo bars?
Well, as might say, a box of the creamy, chocolatey sensation at the grocery store will now put you back $7.99, as compared to just $6.99 two years ago — a 14.3 per cent increase.
That price hike nearly represents the average rise of food prices over the past two years in B.C. — 14.4 per cent on aggregate, according to Statistics Canada.
From food and gasoline to rent and mortgage payments, the past two years has tested the resolve of most British Columbians' fiscal wellness.
However, the end of 2023 also, likely, concludes roughly two years of rabid inflation in B.C. and the consequential interest rate hikes that came with it.
Peaking in May 2022, inflation hit a staggering before Bank of Canada's rate hikes began to take hold and pinch the wallets of British Columbians.
In B.C., the inflation rate has generally been a sliver higher than the rest of Canada.
Since December 2021 and to November 2023, the consumer price index in B.C. has risen from 138 to 152.8, representing a 10.7 per cent increase on prices across the economy.
All of these price increases are who have seen their wages grow just 8.7 per cent from December 2021 up to October 2023. (Average weekly earnings went from $1,132 to $1,230, per Statistics Canada). But B.C.’s public sector workers, have benefitted with a roughly 10.5 per cent wage increase under the “Shared Recovery Mandate.”)
Inflation is far worse, however, if one focuses on key staples of life that have risen much higher. In addition to food, shelter costs for renters and homeowners have risen 14.3 per cent over the past two years (to November).
And gas prices have risen 13.6 per cent over the past two years, from 157.2 cents per litre in December 2021 to 178.7 cents per litre in November 2023. However since prices have only recently fallen, this figure does not show much of the so-called ‘pain at the pump’ in June 2022 when prices peaked at 225.4 cents per litre.
Ticking in below overall inflation is “health and personal care” items that have risen only 9.8 per cent and clothing at just 4.2 per cent, in B.C. over two years.
Rising food costs unavoidable
Perusing online flyers from two years ago it’s apparent no one can escape rising food costs and in some cases, grocery store prices have well exceeded the 14.4 per cent rise in prices.
On Cocowest.ca, Costco sale prices are archived. In December 2021, a package of Colgate toothpaste, Tetley tea and Finish dishwasher tabs cost $12.49, $8.49 and $14.99, respectively; now, they cost $14.99, $9.99 and $16.99, respectively.
Save-On-Foods Janes chicken strips (700 grams) have gone from $8.99 to a sale price of $10.99, or regular $13.99; mini cans of Canada Dry ginger ale shot up from 3/$10 ($3.33) to $4.49; Lay’s potato chips were 3/$8 in 2021 and now they are 3/$10 (while remaining 225 grams per bag); Aylmer tomatoes (796 ml) have gone from 3/$5 to 3/$6 and a six-pack of Portuguese buns rose from $2.99 to $3.99.
And buying more volume today doesn’t cover price increases over the two years; For example, a 454-gram tub of Becel margarine was $2.99 in December 2021 whereas today a 850-gram tub is $6.99.
Shelter costs up much more for some
While shelter costs have technically risen 14.3 per cent, on aggregate, the sting is being felt unevenly.
According to Rentals.ca monthly reports from December 2021 to December 2023, the average asking price for a one-bedroom unit in 91原创 rose from $2,182 to $2,582 — an 18 per cent difference. In 91原创, the asking price went from $2,132 to $2,866 — a 34 per cent jump.
Of course, rent-controlled units and long-term tenancies have countered the increases being experienced by renters having to enter or re-enter the market.
The same principle applies to homeowners. Those with variable rate mortgages have seen their payments skyrocket and more and more British Columbians are having to settle on renewed five-year terms.
By the end of this year, 47.2 per cent of mortgages will experience higher payments and by the end of 2024 the proportion jumps to 65 per cent.
A person who borrowed $500,000 in summer 2018 on a new five-year term at 2.5 per cent, over a 25-year term, is currently paying $2,239 monthly. Fast forward to today, that person will owe $423,190 and should they maintain their amortization period (now 20 years) at a 5.5 per cent interest rate, their monthly payment will spike to $2,896 — a $657 or 29.3 per cent jump in their monthly payment.
Inflation lowering into 2024
Those who have mortgage renewals past 2024 could avoid the worst of the interest rate hikes, as rates are likely to drop next year as the economy slows.
At its Dec. 6 meeting, the Bank of Canada board of governors noted there appears to be an end to extreme inflation while it still maintains “vigilance” against a more stubborn inflation rate of three per cent. The bank’s goal is to get back to two per cent.
In B.C., inflation in October hit just 2.7 per cent, the lowest level since June 2021.
But, said the bank of the national picture, “overall, core measures of inflation had remained in the 3.5% to 4% range but had edged down to the lower end of that range in October. On a three-month annualized basis, core inflation dropped to about 3%.”
A chief concern getting in the way of two per cent inflation rate is those shelter costs, according to the bank: “Members noted that if financial conditions eased prematurely, the housing market could rebound, further fuelling shelter price pressures.”
As such, the bank isn’t entirely done considering further interest rate hikes, if required, as the board “agreed that risks to the inflation outlook remained, and it may still be necessary to increase the policy rate to secure further disinflation and restore price stability.”
