Young Canadians Experience More Inflation Than Older Ones

Canadian inflation is touted as “low and stable,” but for whom is an interesting question to ponder. Statistics Canada’s Consumer Price Index (CPI) when broken down, shows a huge gap in which costs are rising. While averaged out in a weighted basket, CPI looks low and stable. However, when broken down, we see costs rising that disproportionately impact young people.

Consumer Price Index

The consumer price index (CPI) captures retail price movements, and inflation rates. They get the number by measuring the price of goods and services, then give us a weighted average. In other words, they take the costs, then estimate how much of each a typical household uses. The weighted average is the most common thing we hear about, but they also break out components. Looking at each individual component gives deeper insights, like where inflation babies come from.

The broken down numbers highlight a trend that’s not often discussed – not all inflation is equal. For example, the Canadian basket allocates 11.2% towards recreation, and education. Education, containing tuition as a component, may have almost zero cost to a lot of households. Those that do incur this cost, might actually be spending much more on tuition. I don’t know about you, but my tuition was equal (and possibly more) than my rent was while I was in school. The point is, not all risings costs impact everyone at the same level of life – if they even impact you at all.

What Are We Looking At?

Today’s chart isn’t hard to understand, but it does need a quick explanation. We’re looking for the percentage change of the index from 1980, for various components. If you’re looking at the food line at 1996, it means the government estimated costs went up 71.24% since 1980. If you’re looking at clothing in 2010, prices are up 48.49% from 1980. Easy peasy.

Canadian CPI Component Change From 1980

The percent change for Canadian CPI selected sub-component indexes, from 1980 to 2018.

Source: Statistics Canada, Better Dwelling.

Housing Costs Are Up Over 206% From 1980

Tuition is obviously the most interesting data point, but that’s an article for another day. Today we’re talking shelter. Shelter costs including water and utilities is up 208.68% from 1980. Breaking that down, rent increased 144.20% from then, including insurance and repairs. Owner costs increased a massive 205.60% over that period, including carrying costs. Keep in mind these are national numbers, not individual cities. Calgary’s lower cost of ownership is being averaged with Vancouver’s much higher costs.

Canadian Shelter Costs From 1980 to 2018

The percent change for Canadian CPI shelter component indexes, from 1980 to 2018.

Source: Statistics Canada, Better Dwelling.

Shelter costs as a whole in Canada has been one of the fastest rising expenses. Rental costs have increased sharply as well, but not nearly at the pace of ownership. Since housing costs are a larger portion of expenses, the brunt of the impact falls on young people – that haven’t already purchased. Who would have thought? It’s like young people experience a totally different level of inflation.

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  • Trader Jim 7 months ago

    Always. Empires always weaken the purchasing power of future generations, until they’re overturned. Fall of Rome syndrome.

    The world is making a huge mistake by following the lead of the EU and the US, and Asia is going to flip the investment axis.

    • Yvette L 7 months ago

      Care to break it down for us regular folks?

      • Trader Jim 7 months ago

        Rising political tensions made them add lead to the money, so they could keep everyone flush with money. Once people found out they were getting mostly led instead of silver, they lost faith in the currency, and invited foreign interests to slaughter the empire.

  • Natasha 7 months ago

    Could this theory explain the reasoning behind that dude who keeps on throwing a bucket of poop on international students?

    He can’t pay his rent, therefore, he lashes out against society like how chimpanzees throw poo at each other for turf?

  • CanadaSucks 7 months ago

    Expect more food inflation because of global cooling. Also expect people leaving Canada because it will become more and more unlivable. Lot of things happening. Future is really uncertain.

    “Harvest from Hell”: 2.7 Million Acres of Canadian Canola Left Frozen in the Field

    • Brad 7 months ago

      People leaving lol…. we take in 250k+ a year, the majority from countries nowhere even ear the standard of living a low income earner here has. Affordability is a big issue, but for people to leave Canada to immigrate somewhere else they need to have a wanted degree, and if they have a wanted degree they don’t have a problem here.

  • sowhen 7 months ago

    So the housing increase since 1980 is astounding!

    Here’s added perspective.

    Prior to 1980 2 income households were not the norm. They became more normal through the 80’s and were required in the 90’s. the shift to women being in the workforce to truly add to the household income and affordability of things took hold. Backing out of a 2 income household is not easy. Notice the bump in the late 80’s that’s 2 income households of the largest population year 1961 and one or two years on either side buying their first houses when interest rates were high.

    Additionally as times went on and the cost of childcare increased, many people saw that it was actually more cost effective for the lower earning spouse to stay at home because a nanny or the the extra costs of childcare for pick up after 5-6 pm ate up all the income.

    Charts aren’t everything. But they do show trends and anomalies – just look at housing in 1989.

  • straw walker 7 months ago

    The CPI for Sept. 2019 y/y rose 1.9%…
    Does anyone out there working for Stats Canada..every went grocery shopping, bought a car and insured a car, rented or bought a home or pd taxes on a home.
    people living in gopher gulch Sask. maybe have cheap auto insurance or cheap rents..but that has little to do with the general population..
    CPI is outdated and distorts reality.

  • zz 7 months ago
    inflation is clearly higher back in the 80s… way to cherry pick subcategory fitting your narrative.. bravo!!!

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