Canada’s Inflation Surge

Inflation in Canada is on the rise, fueled by new government gas taxes. 

How can businesses and consumers battle this challenge?

In 2022, the annual growth in the Consumer Price Index (CPI) rose to a 40-year high of 6.8%. It has subsided since then but it is still higher than has been experienced in Canada for the past 40 years.

Businesses, especially in the food industry, feel the impact as food production and shipping rely on gas and the discretionary spending of consumers . According to BDC, inflation breeds uncertainty in prices, affecting the business landscape. 

On November 21, 2023 CBC’s headline was: “Canada’s inflation rate cools to 3.1% BUT the cost of living keeps going up”. This affects the purchasing power of consumers and therefore small businesses. As an example, consumers are still paying more than 20% for the same groceries they were purchasing three years ago.  Increases in mortgage rates and rent further curb consumer spending. 

According to RBC:

• Gasoline and clothing expenditures took precedence on vacations and dinners out in October.
• October marked the largest monthly decline in discretionary services in the past six months, with restaurant and hotel purchases declining further. 
• Home related spending (renovations, hiring realtors) declined.
• Expectations are in the next quarter for expenditures to further decline.

How do we navigate through these economic issues as small business owners? One way is to cut our costs through streamlining our systems and processes.  Explore more insights through our many free resources.

Feel free to contact us for a free ½ hour consultation.  Imagine It’s FREE!