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
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.
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