Canada may be weathering the current recession, but it is still difficult for many citizens to make ends meet, especially families. This is mainly due to sharp increases in the cost of living. According to The Bank of Canada, core inflation during 2009 was about .3 percent. Yet, food, energy, housing and other goods have seen consistent spikes in price. Even so, it is a good time for those lucky enough to still be employed and that have considerable disposable income. Brand name designer goods are being drastically discounted, a veritable bonanza for those few that can afford a shopping spree.
Luxury goods often have a huge markup, so some discounting is viable. People are paying for the brand, the name, and the status. Before the recession, one of the most debated practices was the discarding of perfectly good merchandise that would not sell at the asking price. All in the name of protecting “brand integrity.” Times have changed. In response to the recession, some manufacturers have added lines to their offerings that equal a low-cost luxury. For instance, handbag manufacturer Coach has added of merchandise lines under $300 that comprise 50% of their offerings. Prior to the recession the average bags were over $4,000.
As much as they try to pinch, all people in Canada still need food, clothing, energy, and housing. Many economic reasons effect the production of necessary goods and a perfect storm can considerably alter the cost of living. The availability of credit is a major force in the supply side of the equation. Worldwide consumption patterns are changing, as emerging economies demand more meat, dairy, and other foods. Crops are being turned into bio-fuel, leaving less as food for animals and humans. Drought in major food producing areas effect Canada and the rest of the world. The International Monetary fund offers a shocking comparison. Commodity prices from 2005-2008 for wheat have increased 165 percent. Rice increased 143 percent, yellow corn 139 percent, coffee 129 percent, and soybeans 124%. Grocers have been absorbing as much of this increase as possible, with a net increase for 2008 food costs of 4.5 percent. However, it is expected that this can not longer be done and the true costs will be borne by Canadian consumers in 2010.
Author Resource:
Joe Black is the author of this article on Cost of Living Canada .
Find more information about Cost of Living Canada here.
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