It appears that Canadians are being foiled yet again. Governmental policy around inflation is creating financial stress for hard-working citizens. It is no wonder that taxpayers are hostile to the threat of even more tax increases, especially those attempted at being cleverly disguised. High costs combined with high taxes are driving the average citizen into the ground.
The current inflation number is recorded as low, but it appears the actual inflation rate is high, and climbing. The culprit for this confusion is the Consumer Price Index itself; that mysterious measurement tool – the cost of a fixed basket of goods. It has been modified, and the measurement markers changed. “This modified CPI is used to justify a whole gamut of policies, including keeping wage increases low and giving government bragging rights about how low annual inflation is” (1)
Modifying the CPI criteria on paper does not change the reality felt by Canadians. However, it does allow government free reign to indulge in “tax-bracket-creep”. This is why, even after a cost of living adjustment, if one is so lucky to get such an extravagant thing, peoples’ after-tax-dollars are still stretched to the breaking point.
It is likely that the current inflation rate is sitting somewhere around 5% or 6%, according to the old models. (In 1980, it was around 12%). Tragically, Canada could be sinking into 1980’s inflation territory. Will Canadians continue to look the other way, or will they become engaged and start paying attention to their political landscape?
(1) Phil Venoit, President of BC Building Trades, 2019