With the current prices of groceries and everything else, what has led us to this point? more in correlation to why the cost of living feels for myself anyways like it has gotten worse.
In: Economics
What sharp increase in inflation? Canadian inflation (as measured) is moderate at 2.7% and even in the highest point was rather moderate. Are you asking an economics question or you using an economics term to express a feeling?
Canadian inflation is quite moderate compared to historical domestic and global rates. Canadian wage growth has been extremely low because the economy is still largely resource extraction/export oriented and wages are easy to suppress by importing labour force; it doesn’t help that the economy is dependent on food imports (what you feel first in day to day spending), and fast moving consumer goods manufactured in the U.S./abroad.
Each sector has it’s own circumstances, but with groceries in particular, it seems the retailers have found how much people are willing to still pay for goods, so after the prices were raised during high demand times, they kept them there. Now due to the push for ever-higher profits (amid record levels of revenue) they try to cut corners where they can.
Canada along with the good ole USA adopted an extremely dovish monetary policy when the global economy shut down due to COVID in 2020. This means that, in order to prevent a global recession, the Bank of Canada lowered the rate for banks to borrow money to almost 0% and printed a ton of money to ‘stimulate’ investment. The by-product of dovish monetary policy is inflation because when there is a large supply of dollars in circulation, the dollar loses value against all other assets (real estate, eggs, oil, etc.).
You might be asking more about a regional issue with inflation where you live in Canada. As others pointed out, our rate of inflation as a whole is about 2.7%. But that’s just an average of the entirety. Other areas, particularly in some geographic locations have a higher inflations in other areas (groceries have taken a huge inflation in cost in the Territories recently for example) and fuel prices and energy prices have jumped up significantly in some provinces. You have the increase carbon tax policies that the Liberal government keeps enacting which causes trickle down economics to occur, meaning, as corporations and manufacturers and logistic companies are dinged these added taxes and fees, these companies pass this cost off onto those who do business with them until it hits all the way down to the consumer level. And each tier, you have every hand in the pot trying to skim a little extra off of the inflation.
Example: say carbon tax added 3% to the manufacturing cost, the manufacturer will charge 4% more to those who buy direct from them. The logistic chain will charge 5% more onto the wholesalers/retailers and they’ll charge 6% more. I’m using arbitrary values here to keep this simple.
In regions where there are also provincial sales tax on top of the general sales tax, these minor increases that trickle down to the consumer add up in additional value the consumer pays in sales taxes. Cost goes up 6% or more, and you’re also being charged 5% GST and average 7% PST on that increased price as well which makes inflation worse in provinces with the provincial sales tax.
There’s a lot more to it but hope this is a good starting point.
We are on the ragged bleeding edge ALL of the time, not a headline, meme, social media post or anything that doesn’t use marketing tactics to get eyes on. It is all emotional warfare that drives our emotions up to get a response from engagement to enragement. The same topics discussed today are more emotionally charged than years gone by, marketing psychology drives people into their own echo chambers that then drive their emotions higher to get views, time on page, and engagement in order to up the cost of advertising. Journalism used to be about integrity and the truth, it is now just a money maker, truth be damned. This has led to there being two RAGING sides to everything. My side and my ENEMY’S, not an opposing side or viewpoint anymore, if you don’t agree with me about EVERYTHING, you are my mortal enemy and should have your rights taken away and your opinions and feelings vilified FOR ETERNITY. So your feelings are VERY valid, it is the manipulation of your feelings at every turn that makes us all a little anxious, a little angry, and a little despairing at the cognitive dissonance caused by all of the counter-messaging.
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