British Columbians feeling the pinch of the soaring cost of living may be hoping that 2024 will be better. However, many costs — including electricity and grocery bills — will continue to go up.
Here are a few changes that consumers can expect in 2024.
Electricity costs likely going up
The B.C. government said in October that the province’s power utility is applying for a 2.3-per-cent rate increase starting in April, adding about $2 a month to the average residential bill.
A statement from the Energy Ministry said it’s the sixth year in a row that B.C. Hydro has applied for an increase below the rate of inflation.
It says rates are currently 15.6 per cent lower than the cumulative rate of inflation over the last seven years, starting in 2017-18, and 12.4 per cent lower than the 10-year rates plan established by the previous government in 2013.
The ministry says the “modest” rate increase application comes after consideration of a variety of options and their long-term impacts, and the B.C. Utilities Commission is expected to decide on the plan by the end of February.
Rent? Yes, that will probably go up, too
Those renting a home may see their rent go up, although the amount landlords can hike rent is capped. The B.C. government has set the 2024 maximum allowable rent increase at 3.5 per cent, below the inflation rate of 5.6 per cent.
It applies to rent increases starting Jan. 1, 2024. Landlords can only increase rent once every 12 months, and have to provide three full months’ notice to tenants.
Home prices could drop (but not in Metro Vancouver)
Home prices in B.C. are expected to be “sluggish” heading into the New Year, according to Re/Max’s 2024 forecast. The agency says prices in Metro Vancouver, Canada’s most expensive market, are expected to rise two per cent to an average of $1.52 million, while Victoria prices will likely dip about two per cent to $942,000.
A Royal LePage forecast says the average price of all properties in Greater Vancouver is expected to increase by three per cent to $1,281,732. The average price of a detached property in Metro Vancouver is expected to rise 2.5 per cent to $1,778,785, according to the report, while the price of a condo will likely go up by four per cent to $795,808. (Victoria is not part of this forecast.)
Grocery bills up
Canada’s annual food report says most products will have an average inflation rate increase between 2.5 and 4.5 per cent in 2024. That’s less than the increase of seven per cent forecast in 2023, but it does mean grocery bills will likely go up again.
Federal pricing analysis from the U.S. Department of Agriculture projects that food prices will continue to rise through 2024. Food price increases are expected to continue to decelerate but prices are not expected to drop. In 2024, all food prices are predicted to increase about 2.9 per cent, according to the USDA.
Interest rates may go down
The Royal Bank predicts the Bank of Canada will cut rates by 50 basis points in the third quarter of 2024 and another 50 basis points in the fourth quarter. So that would bring the overnight rates to four per cent by the end of 2024, still well above the previous neutral level of two per cent, but down from five per cent.
The bank says the expectation is that rates will hold steady and might even come down toward the end of next year.
Federal taxes
According to the Canadian Taxpayers Federation, nearly every Canadian will pay higher federal income taxes in 2024. This includes an increase in payroll tax, increases in contributions for the Canada Pension Plan and employment insurance premium hikes.
B.C. Ferries fares
B.C. Ferries’ fares are set to rise an average of 3.2 per cent a year for four years, starting April 1, although actual increases must still be determined and are expected to vary by route.
Carbon taxes up
B.C.’s carbon tax is set to rise from $65 a tonne to $80 a tonne on April 1, 2024. The carbon tax will cost 17 cents a litre of gas, 21 cents a litre of diesel and 15 cents a cubic metre of natural gas.
Meanwhile, the federal government’s carbon tax is also set to increase to $80 a tonne from $65 a tonne on April 1. That will increase the current 14.3 cents a litre carbon tax to 17.6 cents a litre of gas for provinces that don’t have their own carbon tax.
Minimum wage
The minimum wage in B.C. is $16.75 per hour as of June 1, 2023. There hasn’t been any indication it will rise again this year.
Farm workers’ pay to increase
Minimum piece rates for hand harvesting of specified farm crops will increase by 6.9 per cent on Jan. 1, according to the B.C. government.
The increase applies to 15 crops harvested by hand as specified in the employment standards regulation. The hand-harvested crops are peaches, apricots, brussels sprouts, daffodils, mushrooms, apples, beans, blueberries, cherries, grapes, pears, peas, prune plums, raspberries and strawberries.
The increase is based on B.C.’s average annual inflation rate in 2022.
Alcohol tax
According to the Canadian Taxpayers Federation, the alcohol escalator tax will increase the excise taxes on beer, wine and spirits with inflation on April 1, 2024.
Taxes already account for about half of the price of beer, 65 per cent of the price of wine and more than three quarters of the price of spirits.
The alcohol escalator will result in a 4.7 per cent increase in the federal excise tax on beer, wine and spirits in 2024. This increase will cost taxpayers about $100 million in 2024-25.
— With files from the Times Colonist and The Canadian Press
