Are they lying to us about the "real" inflation rate?
Rob Snow, CFRA's afternoon drive host, routinely snickers on the air each time Canada's inflation rate numbers are released by the Canadian government.
He usually wonders aloud about how it can be that the inflation rate magically hovers around 2% - the latest release in November is 2.5% - while commodity prices continually creep or skyrocket upwards with no end in sight. Gasoline prices are 17.6 percent higher than they were in November 2006, and they went up 4% in the past month alone! Coffee is getting more expensive (Tim Hortons hiked their prices this past summer) and fruits and vegetables regularly spike. Statistics Canada pointed out in its November release that mortgage "interest cost index" has increased by 7% and restaurant meals are close to three percent more expensive than they were one year ago. Let's not even mention the increased hydro rates and property taxes!
Apparently, one "justification" for inflation rates remaining "stable" in recent years (according to the government, that is) is the fact that car purchase costs have decreased by 3.9% year to year. Costs associated with buying a computer have fallen through the floor in recent years, 14.9% in the last year alone! Sure, but how many times a year does an average Canadian buy a car and a computer? Compare that to the frequency of gasoline, citrus fruit and coffee purchases made by families from coast to coast and you can see how ridiculous this comparison scale really is.
It's all a scam, Rob Snow has speculated, and I think that a key indicator to show that he's right on track is a CNNmoney.com report today. Statistics Canada says that fruit and vegetable prices are down by 6.2 to 11 percent as compared to the previous month. CNN states that food prices have gone up 4.7% since January 2007 (led by an increase in fruit, vegetable and milk prices), "outpacing the 4.3% overall cost of living increase", led by a 23.2% increase in the price of milk alone. If their fruits and veggies are "leading the upward charge", how come our prices are down so much for the same products? It doesn't make sense!
Can both governments be telling the truth? Might Rob Snow be right? Are we being "snowed" by the great economic leaders of our country?
If milk, vegetables, cereal, beef and poultry are on the rise just a few hours south of here, how can it be that vegetables have decreased by 11% and fruits went down by 6.2% here in the great white north? Are we buying cheap fruits and veggies from Cuba (which would obviously be illegal in the States) or have we started growing our own oranges, bananas and carrots somewhere in the snow up here? Where's the discrepancy coming from?
It just doesn't add up. Who suffers? The first people who come to mind are our seniors who have seen their Canada Pension Plan benefits go up by about two percent (if they're lucky), based on what seems to be fudged CPI numbers. Many seniors are on fixed incomes. The Government of Canada bases their "raise" in pension rates on CPI numbers.
It's a shame, really, for anybody who signs personal cheques, keys their PIN numbers into debit machines or forks out cold, hard cash for goods and services knows that living in an average Canadian village, town or city costs more than ever. I'd love for someone from the Bank of Canada or Statistics Canada to justify their numbers - when property taxes alone are going up by 5% or more in cities from coast to coast, it's a farce to expect us to believe that things (overall) are only about 2% more expensive this year as compared to last.
All that when an economy far larger, yet pretty much identical to ours just a few hours away is up by at least double that amount? What's going on!?