Inflation and Interest Rates Diminish Canadians' Purchasing Power

A report highlights the disproportionate impact on lower-income households since 2022, while wealthier households benefit from investment gains.

New Parliamentary Budget Officer report indicates significant erosion of purchasing power for lower-income Canadians due to inflation and high interest rates.
Despite inflation, the average purchasing power of Canadian households has risen by 21% since late 2019, supported by government transfers and wage gains.
Price increases have averaged 15% for essential goods, with food, shelter, and transportation driving most of the inflationary pressure.
The Bank of Canada's interest rate hikes, reaching 5% by mid-2023, have increased mortgage costs, affecting household finances.
Wealthiest households have seen a net gain in purchasing power in 2023, as investment income growth outpaced interest payments.