Canadians awoke this week to media headlines that “Canada’s inflation rate fell to 6.8% in November”.
Unfortunately, this headline does not tell the entire story.
While the CPI did come down slightly core inflation in other areas increased.
As an example, food inflation increased by 11.4% year over year in November, a fact that will not come as a surprise for anyone who has visited a grocery store recently.
Likewise, for those facing mortgage interest rate increases, Statistics Canada reports a 14.5% increase.
This is an averaged rate, as many with variable rare mortgages have been experiencing increases well beyond this amount.
One of the many challenges with inflation is that items such as groceries and paying your mortgage, rent or line of credit all come from your household net income after you have already paid income taxes.
This higher inflation means you have less purchasing power, as your income does not keep pace with the rise in your cost of living.
Unfortunately, on Jan. 1 2023, another round of payroll deductions from the federal government is increasing – in this case increased EI and CPP premiums -- meaning your net take home pay is going to be less.
This also affect employers.
As the Canadian Federation of Independent Business (CFIB) reports: “on January 1, (EI) premiums for employers are set to increase by as much as 5.2% per employee. Altogether, the increases in CPP and EI could cost business owners up to $325 more per employee — a 6.7% increase from 2022.”
These increased payroll costs are passed on to consumers and this only further helps to fuel inflation.
For the record, the Conservative Official Opposition did request the Trudeau Liberal government delay the increase to the EI premiums (something the Federal Government has done previously) however in this case PM Trudeau refused to do so.
On April 1 there will be another round of tax increases related to the elevator excise tax on alcohol, that automatically increases each year thanks to the Trudeau Liberal government.
Additionally, on April 1 carbon taxes are slated to increase by $15 a ton, from the current $50 to $65 a ton.
So 2023 is going to be a more expensive year for many Canadians and, as the Official Opposition, we will continue to make the point that many Canadians can no longer afford to take home less.
Before I close this week my final report for the year, I would like to sincerely wish all citizens Happy Holidays and a very Merry Christmas!
I would also like to sincerely thank all first responders, our military personnel and those in public service work that means they will not be home with their families this Christmas.
Finally this week's question:
What would you most like to see from your federal government in 2023?
I can be reached at [email protected] or call toll free 1-800-665-8711.
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.