Canadians continue to watch our purchasing power erode.
If we had listened to those running institutions like the Bank of Canada and the federal government, we would have expected inflation to have normalized by now.
After all, they spent months and months downplaying inflation, claiming it would be ‘transitory,’ and expressing confidence that high inflation wouldn’t last long at all.
Well, turns out they were completely wrong.
Inflation has hit yet another three-decade high.
The inflation rate hit 6.8%, up from 6.7% the previous month.
6.7% was already a three-decade high, and it only took another month for that high to be exceeded again.
Core inflation reached 4.23%, the highest rate since 1990.
Food prices surge
Amid the numbers a few areas stand out.
For example, food prices are up 8.8%.
And food purchased in stores is up 9.7% in prices.
That’s the highest gain since 1981, giving us an idea of how dramatic these prices increases are.
With gas prices going up dramatically in recent weeks, those numbers are not reflected in the latest inflation report.
This means that the inflation rate could be even higher.
And of course, many question the accuracy of the claimed inflation rate, as the true rate of prices increases seems much higher than is often reported.
A key factor
Something that is essential to understand about inflation is that it is cumulative.
So, even when inflation starts ‘going down,’ that doesn’t erase the impact of the already higher prices.
Additionally, it can falsely make it appear that inflation is ‘getting better,’ when it really isn’t.
If prices surge 10% in a year, any future inflation is based on those higher prices. If inflation then ‘falls’ to 5%, Canadians still see price increases on top of already inflated prices.
This is a key part of why inflation is so damaging.
The impact lingers and causes long term damage to our purchasing power, making many Canadians poorer and putting their financial dreams further and further out of reach.
Meanwhile, politicians like Justin Trudeau and Jagmeet Singh will keep on blaming ‘greed’ and ‘corporations’ for inflation, despite the fact that it’s big government, big spending Trudeau-Singh policies enabled by the Bank of Canada that have contributed in large part to the surging inflation that’s crushing the finances of Canadians.
Unsurprisingly – given that he’s been warning about inflation for quite a while – Conservative leadership front-runner Pierre Poilievre put out a video shortly after the inflation numbers were revealed:
“Inflation hits another 3-decade high. Food prices rise 10%. #JustinFlation
End it now: become a member so you can vote for me to become leader and end inflationary taxes and deficits.”
Inflation hits another 3-decade high. Food prices rise 10%. #JustinFlation
End it now: become a member so you can vote for me to become leader and end inflationary taxes and deficits.
— Pierre Poilievre (@PierrePoilievre) May 18, 2022
As inflation continues to surge, Poilievre’s campaign will gain even more credibility, as Canadians look for policies that are diametrically opposed to the inflationary Trudeau-Singh agenda.
Poilievre’s opponents like Patrick Brown & Jean Charest will face more challenges, given their support for inflationary carbon taxes.
Perhaps that’s why their attacks on Poilievre have become more and more unhinged, as the facts on the ground don’t bode well for them or for any politician who has pushed carbon taxes.
Canadians need lower taxes, sound money, and less government. Otherwise, inflation will continue to strip away our purchasing power.