There are positives and negatives to a decrepit loonie.
Positive: incredibly low gas prices. Negative: astronomically high food prices. Indeed, cauliflower is now a luxury good in Canada.
Now for some tough economic reality: experts have determined that soaring food prices are more than offsetting what you’ll save at the pump. While the price of crude oil has fallen off a cliff, the drop in the price of gas hasn’t exactly been on par. This decrease is especially minor when compared against the rising price of food, which is expected to be between two and four per cent this year.
Most concerning is the price of fruits and vegetables, which rose between nine and 10 per cent last year. So yes, $3 cucumbers – as well as $1.39 apps and higher telecom bills – are here to stay.
“The percentage of our budget that goes to transportation is much smaller than the percentage of our budget that is consumed in food,” said Ian Lee, an economics professor at Carleton University’s Sprott School of Business.
“Yes, we’re saving at the pump, but the savings are more than offset by what we’re paying in the food stores.”
An analysis by BMO Nesbitt Burns shines more light on the disparity:
While prices had fallen 11 per cent from a year earlier, thus bringing down inflation by 0.4 of a percentage point, food prices had climbed by 3.4 per cent, adding almost 0.6 of a percentage point, according to the Globe and Mail.
Dropping a bill on broccoli sucks for consumers, but the situation is also overwhelmingly negative for wholesalers, restaurateurs and grocery store owners, who are now forced to import goods from the United States. Canadian suppliers are losing a considerable amount of business as a result.
“It’s mind-boggling that I have to buy Malpeque oysters from my American importer in Boston,” said David McMillan, the co-owner of Joe Beef and two other restaurants in Montreal, in an interview with the New York Times. He says the cost of the oysters from Prince Edward Island had risen to 120 Canadian dollars a box from about 90 Canadian dollars – “a lot of money for not a special oyster.”
That’s what it’s come to, Canada: a lot of money for not a special oyster.
The real problem, of course, is when low-income families are forced to spend a lot of money for a loaf of bread.