Time for Canadians to change spending habits amid skyrocketing inflation, expert says

As Canada’s inflation continues to rise to levels not seen since the 90s, experts say it’s partly up to the consumer to change their spending habits in order to keep life affordable.

Pascal Theriault is the Director of Farm Management and Technology at McGill University, and he says the sticker shock at grocery stores is particularly felt because Canadians have had relatively cheap food prices for many years.

“Despite our … climate, we’ve had one of the cheapest food basket in the world. That is for the average Canadian, of course. For Canadians more in financial need, feeding themselves has always been a challenge. And as you devote more and more of your income on food … you don’t have availability to spend on other items, he explained.

“We know rent is going up also. So we are faced as consumers with an increase in costs and everything at the same time, big difference being food is essential. Because we were used to relatively cheap food, we were used to making choices when we would go to the grocery store that were not the most efficient. I think moving forward we will have to rethink the way we consume processed foods.”

He recommends consumers– choose local, in season, and on sale food– rather than what is on their list. He adds making a home-cooked meal over-ordering food from out will also make a difference.

“I think for the longest time …  society has been a bit lazy in the sense that grocery store shelves are always full. We never had to question access to food and the price of food because it was cheap. And so we made probably bad choices,” he said.

Prices at the grocery store continue to rise, with many items breaking records for price jumps. Among them: eggs, butter, pasta, cheese, and breakfast cereals.

As for if the Canadian government can do anything about our drastic rise in prices across the board– associate professor of economics at Simon Fraser University Lucas Herrenback says all the Bank of Canada can do is continue to raise interest rates.

“Keep raising interest rates until inflation goes down, and we don’t know when it stops, it’s a little like you’re driving a car and you don’t have a speedometer you only know if your car is running hot or not.”

He is however hopeful that prices will start to come down as interest rates go up.

“The [Toronto] Leafs could win the Stanley Cup. These things are possible. There’s a probability attached to them. And the same is true with higher inflation,” he explains. “I don’t think it’ll go higher. It’s possible. I think it’s most likely that it’ll come down, but it won’t be down to two per cent next year, either. So these things are sticky. It’ll take some time to go down and we’ll be looking at inflation higher than target for a good number of years at this point.”

On Wednesday, Stats Canada announced the national inflation rate for March rose to 6.7 per cent, the highest level since 1991.

The Consumer Price Index for February was already at a sky-high 5.7 per cent, so this month’s figure all but guarantees the Bank of Canada will continue to raise its key interest rate to try to tame inflation to a much more moderate two per cent.