As pandemic continues to wreak havoc on supply chains and the labor market, British Colombians have felt the economic squeeze.
Experts do not predict much relief on the horizon in 2022, as the bill comes back-to-back natural disasters and the housing market continues to simmer.
From food to fuel, here are four ways life is getting more expensive in the new year – and a handful of ways it probably won’t.
Food
According to Canada Food Price Report for 2022, food prices are expected to rise between five and seven percent in 2022. Expenditure on dairy products and restaurant bills will experience the largest cost increase – between six and eight percent.
It could result in nearly $ 1,000 extra on the grocery bill for a Canadian family of four.
British Columbia, whose food prices were expected to fall in 2021, is now listed among the provinces where food prices will rise – at a “higher than average” rate, according to Sylvain Charlebois, project manager and director of the Agri-Food Analytics Lab at Dalhousie University.
‘I think it has a lot to do with what happened recently the floods“, he explained.
“We’ve just surveyed Canadians about access to food, and overall, about 20 to 22 percent of Canadians have actually seen empty shelves due to supply chain problems, but in BC, it’s actually 41 percent.”
Fuel
Heating your home is also becoming more expensive.
FortisBC warned that gas prices will rise by 3.47 percent this month to reflect the rising market price of the commodity. The supply provider expects prices to jump from $ 3.84 per gigajoule to around $ 4.50 per gigajoule.
“In terms of monthly impact, our customers are going to look at about nine percent monthly impact on their bills … which equates to about $ 8 more per month,” Diana Sorace, a spokeswoman for FortisBC, said in an interview.
Prices rose throughout the province by one corresponding amount in October and will be revised again in March.
Taxes
British Columbia’s The CO2 tax will also increase from $ 45 to $ 50 per tonne of greenhouse gases on April 1, 2022. However, its climate input tax deduction will follow suit three months later with an increase from $ 193.50 per adult and $ 56.50 per child.
British Colombians will see larger deductions on their payslips this year.
The federal government has increased the earnings ceiling of the Canada Pension Plan at the highest rate in 30 years, which means that workers and companies contributing to the scheme will be affected.
The contribution rate for employees and employers is set to increase to 5.7 percent in 2022 against 5.45 percent in 2021. The contribution for the self-employed is planned to increase to 11.4 percent, up from 10.9 percent.
The public has still not seen Surrey’s 2022 budget, but the mayor promises to keep the tax increase below 3%
In Vancouver, property taxes are rising.
This month, the city adopted its budget for 2022, which included a 6.35 percent increase in property taxes, mainly attributed to increased spending on the Vancouver Police Department.
The tax increase is expected to cost the average condominium owner an additional $ 6 per month in 2022. The owner of a median detached house will pay $ 14 extra per month, and a median owner of a corporate property will pay an additional $ 26.
Housing
Tenants also will not be out of the hook for increases – BC government pandemic freezing of rent across province expires on 31 December.
With effect from 1 January, landlords can raise the rent by 1.5 percent, provided three months’ notice has been given, which means that many tenants may have to pay more in the new year. The maximum allowable increase is determined on the basis of the inflation rate and can only be imposed on tenants once a year.
Those who want to buy a home can also expect to pay a premium, said Thomas Davidoff, as record low housing ads continue to drive up the selling price.
“I think in the short term, it looks like there are still more buyers and sellers out there, which tends to lead to price increases,” the associate professor at UBC’s Sauder School of Business explained.
Low inventories can lead to pent-up sellers, Davidoff added, but even if more homeowners sell in 2022, they are likely to end up in the buyer’s market and keep the pressure stable.
According to the BC Real Estate Association, almost 9,600 homes was sold in October – a 13.7 percent drop from the same month a year ago. The average price was $ 964,000, an increase of almost 19 percent from a year ago.
The Canadian Real Estate Association predicts that BC and Ontario will see the highest housing prices in 2022 at $ 990,038 and $ 971,080, respectively.
Bank of Canada aims to keep the annual inflation rate between one and three percent in 2022. As employment rates rise and economies return, it may increase its trend-setting interest rate – but not likely until April, it said in December.
In the long run, rising interest rates could create “a rush to buy,” Davidoff said, followed by “downward pressure” on the market as the cost of borrowing begins to rise.
Good news for insurance, hydro
While it may seem like everything is getting more expensive, there are a few costs that are not expected to increase in the new year.
There is no basic tariff change at ICBC until December 2022, which means that if a change was required, it would not take effect until 2023.
That Canadas Insurance Bureau “also does not expect interest rate hikes” for home insurance, but noted that “severe weather trends are worrying.”
No single weather event leads to an increase in insurance premiums, spokeswoman Vanessa Barrasa wrote via email, and if natural disasters were to affect the premiums, it would happen “in time.”
BC Hydro has requested a 1.4 percent drop in interest rates in 2022, which means the average home customer will see savings of around $ 23 a year or $ 2 per year. month.
Thereafter, the utility has requested increases of 2 and 2.7 percent for an annual average rate increase of 1.1 percent over three years. The rates are still awaiting approval from the BC Utilities Commission.
Squeeze on services
British Colombians will feel the effects of the COVID-19 pandemic, the wildfires and the floods for many years to come, but the pressure will manifest itself in different ways.
To keep economies moving through the crises, both provincial and federal governments have taken on huge amounts of debt that could weigh on budgets by 2022, according to Pedro Antunes.
“We will not be able to spend as much as we wanted on health care,” said the chief economist of the Conference Board of Canada.
“As interest rates rise, we will see that the amount we have to spend on financing the debt rises. It will take away from our ability to do other things we would like.”
While Antunes expects BC’s economy to return from many pandemic-induced effects this year, he said cuts in programs and services that matter to taxpayers may be on the horizon to help pay for it.
With files from Global News’ Erica Alini
© 2022 Global News, a division of Corus Entertainment Inc.
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