The prices of absolutely all products and services – food, housing, transport, etc. – increased last December, which is going to happen again in the first months of 2022, if not longer.
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Statistics Canada indicated yesterday that the consumer price index increased by 3.4% – 3.8% in Quebec – in 2021, the largest increase since 1991.
Above all, the federal agency indicated that in December, the increase was 4.8% (5.1% in Quebec), whereas it had been 4.7% in November. Inflation is therefore accelerating, and in all categories. Even the price of beer will not be spared.
Source: Statistics Canada. Consumer price index, annual average, not seasonally adjusted.
“The year 2021 started slowly and inflation gained momentum as the year passed. For the next few months, it will continue at very high levels,” said Desjardins chief economist Benoit P. Durocher.
Courtesy picture
Benoit P. Durocher, Senior Economist at Desjardins
It is only in the spring, or even later, that we can hope to return to normal levels.
“Inflation should be 1% to 3% in normal times. At 5.1% in Quebec, it will take several months before returning there, ”adds the economist.
Inflation predictions – up or down – are also less accurate, or “riskier” than ever.
“With everything that is happening, we have raised the risk level of our predictions,” said Mr. Durocher.
The reasons for the rise in prices, we are beginning to know them. Transportation problems, supply difficulties, labor shortages, high demand.
Source: Statistics Canada. Consumer price index, annual average, not seasonally adjusted.
“We have a bunch of problems that restrict the offer,” sums up the expert.
purchasing power
Photo Francis Halin
Lyne Riendeau, met yesterday in a Maxi on the South Shore of Montreal, says that she has to cut down on treats at the grocery store to buy the bare necessities: “Bananas at home are a necessity. It’s hard, but we have no choice. We will cut on other things. »
Meanwhile, wages rose only 2.6%, again according to Statistics Canada.
Quebecers have thus seen their purchasing power melt like snow in the sun over the past year.
Photo Francis Halin
Valérie Desmeules, crossed yesterday in the fruit and vegetable aisle of the IGA of Saint-Basile-le-Grand, does not think that food prices will go down. “Apples are very expensive. Frankly, for a fruit that comes from here, it’s a bit outrageous,” she says.
But the longer-term trend is less grim. “Since 2010, wages have risen faster than inflation two-thirds of the time. The purchasing power of Canadians has therefore increased,” says Mia Homsy, CEO of the Institut du Québec (IDQ).
There is hope, adds Jean-François Rouillard, associate professor at the School of Management of the University of Sherbrooke.
“Given the labor shortages everywhere, purchasing power should increase. I expect to see significant wage catch-ups,” he says.
where it hurts
In 2021, only clothes and shoes did not cost more. All the rest of the components of the CPI, such as housing or food, jumped. Transport takes the prize with an increase of 7.2%, in particular due to the increase in the price of second-hand cars.
Source: Statistics Canada. Consumer price index, annual average, not seasonally adjusted.
◆ Following the easing of COVID-19 related distancing measures throughout 2021, prices for services consumed outside the home have started to recover from the lows seen in 2020.