As the pandemic continues to wreak havoc on supply chains and the labour market, British Columbians have felt the financial squeeze.
Experts don’t foresee much relief on the horizon in 2022 as the bill comes in for back-to-back natural disasters and the housing market continues to sizzle.
From food to fuel, here are four ways life is about to get more expensive in the New Year — and a handful of ways that it probably won’t.
Food
According to Canada’s Food Price Report for 2022, food prices are expected to increase between five and seven per cent in 2022. The costs of dairy products and restaurant bills will see the greatest cost increase — between six and eight per cent.
That could translate into nearly $1,000 extra dollars on the grocery bill for a Canadian family of four.
British Columbia, whose food prices were forecast to decrease in 2021, is now listed among the provinces where food prices will go up — at a “higher than average” rate, according to Sylvain Charlebois, project lead and director of the Agri-Food Analytics Lab at Dalhousie University.
“I think it has a lot to do with what happened recently with the floods,” he explained.
“We just surveyed Canadians on food access and generally speaking, about 20 to 22 per cent of Canadians have actually seen empty shelves due to supply chain issues but in B.C. it’s actually 41 per cent.”
5:11 How B.C.’s flooding event is affecting farmers
How B.C.’s flooding event is affecting farmers – Nov 20, 2021
Fuel
Heating your home will become more expensive too.
FortisBC warned that gas rates will increase by 3.47 per cent this month to reflect the rising market price of the commodity. The utility provider expects rates to jump from $3.84 per gigajoule to roughly $4.50 per gigajoule.
“In terms of monthly impact, our customers are going to be looking at about a nine-per cent monthly impact on their bills … which works out to about $8 more per month,” said Diana Sorace, spokesperson for FortisBC in an interview.
Rates increased across the province by a similar amount in October and will be reviewed again in March.
1:58 Trans Mountain pipeline restarts after 3-week shutdown
Trans Mountain pipeline restarts after 3-week shutdown – Dec 6, 2021
Taxes
British Columbia’s carbon tax will also increase from $45 to $50 per tonne of greenhouse gases on April 1, 2022. Its climate action tax credit, however, will follow suit three months later with an increase from $193.50 per adult and $56.50 per child.
British Columbians will see larger deductions on their pay stubs this year year.
The federal government has increased the Canada Pension Plan earnings ceiling at the highest rate in 30 years, meaning workers and businesses who contribute to the plan will take a hit.
The contribution rate for employees and employers is set to increase to 5.7 per cent in 2022, up from 5.45 per cent in 2021. The contribution for self-employed workers is scheduled to increase to 11.4 per cent, up from 10.9 per cent.
2:13 CFIB calls for action on critical labour shortage facing small businesses
CFIB calls for action on critical labour shortage facing small businesses – Dec 9, 2021
This month, the city passed its 2022 budget, which included a 6.35 per cent hike in property taxes, largely attributed to increased spending on the Vancouver Police Department.
The tax hike is expected to cost the median condo owner an additional $6 per month in 2022. The owner of a median detached home will pay an extra $14 per month, and a median business property owner will pay another $26.
2:07 Vancouver home and business owners facing another big hike to their property tax bill
Vancouver home and business owners facing another big hike to their property tax bill – Dec 8, 2021
Housing
Renters won’t be off the hook for increases either — the B.C. government’s province-wide pandemic freeze on rent expires on Dec. 31.
Effective Jan. 1, landlords can raise the rent by 1.5 per cent, provided three months’ notice has been provided, meaning many renters could be paying more in the New Year. The maximum allowable increase has been set based on the rate of inflation and can only be imposed on tenants once per year.
Those looking to buy a home can expect to pay a premium too, said Thomas Davidoff, as record-low home listings continue to drive up the sale price.
“I think in the short run, it seems like there are still more buyers and sellers out there, which tends to lead to price increases,” explained the associate professor at the UBC’s Sauder School of Business.
Low listings may lead to pent-up sellers, Davidoff added, but even if more homeowners sell in 2022, they’ll probably end up in the buyer’s market, keeping the pressure steady.
2:05 Vancouver apartment complex offers housing for adults with autism
Vancouver apartment complex offers housing for adults with autism – Nov 8, 2021
According to the B.C. Real Estate Association, just under 9,600 homes were sold in October — a decrease of 13.7 per cent from the same month a year ago. The average price was $964,000, up almost 19 per cent from a year ago.
The Canadian Real Estate Association forecasts B.C. and Ontario will see the highest home prices in 2022 at $990,038 and $971,080 respectively.
The Bank of Canada aims to keep the annual inflation rate between one and three per cent in 2022. As employment numbers go up and economies rebound, it may increase its trendsetting interest rate — but not likely before April, it said in December.
In the long-term, rising interest rates could create “a rush to buy,” said Davidoff, followed by a “downward pressure” on the market when the costs of borrowing start to go up.
2:07 Should B.C. look towards ending single-family zoning like New Zealand?
Should B.C. look towards ending single-family zoning like New Zealand? – Oct 26, 2021
Good news for insurance, hydro
While it may seem like everything is getting more expensive, there are a few costs that are not forecast to rise in the New Year.
There will be no basic rate change at ICBC until December 2022, meaning that if a change were required, it wouldn’t take effect until 2023.
The Insurance Bureau of Canada is “not expecting rate increases” for home insurance either, but noted that “severe weather trends are concerning.”
No single weather event leads to an increase in insurance premiums, wrote spokesperson Vanessa Barrasa by email, and if natural disasters were to affect premiums, it would happen “in time.”
BC Hydro has requested a rate decrease of 1.4 per cent in 2022, meaning the average residential customer will see savings of about $23 per year or $2 per month.
After that, the utility company has requested increases of 2 and 2.7 per cent for an annual average rate increase of 1.1 per cent over three years. The rates are still pending approval from the BC Utilities Commission.
4:54 Treatment and recovery benefits under ICBC’s new Enhanced Care Model
Treatment and recovery benefits under ICBC’s new Enhanced Care Model – May 1, 2021
Squeeze on services
British Columbians will feel the impacts of the COVID-19 pandemic, the wildfires and the floods for many years to come, but the squeeze will manifest in different ways.
In order to keep economies moving through the crises, both the provincial and federal governments have taken on massive amounts of debt that could weigh down the budgets in 2022, according to Pedro Antunes.
“We’re not going to be able to spend as much as we wanted on health care,” said the chief economist for the Conference Board of Canada.
“As interest rates come up, we’re going to see the amount that we have to put towards financing the debt increasing. That’s going to take away from our ability to do other things we’d like to.”
While Antunes expects B.C.’s economy to rebound from many pandemic-induced effects this year, he said cuts to programs and services that matter to taxpayers may be on the horizon to help pay for it.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
