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.”
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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.
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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.
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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.
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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.
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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.
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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.
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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.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
