Some experts are saying 2024 might put a little less pressure on consumers’ wallets after two years of inflationary prices rocked Saskatchewan households.
The Bank of Canada hiked interest rates several times in 2023 in an effort to slow down consumer spending during a time of high prices.
The Bank of Canada has raised its policy rate 4.75 percentage points since March 2022 in hopes of taming decades-high inflation.
In December 2023, the bank warned that more hikes are likely to come if inflation doesn’t ease.
Despite the hikes and the bank’s intention to slow down spending, home sales in Saskatchewan accelerated.
“We still had very high sales compared to previous years. We were above average for the vast majority of the year. Certainly, all year, we were above the 10-year average,” said Chris Guérette, president of the Saskatchewan Realtors Association.
While the province’s benchmark price rose, Saskatchewan was still more affordable this year than other provinces.
Saskatchewan’s population is growing quickly, and residents are running into problems with low housing inventory levels.
“Inventory sat at two to three months in our large urban centres for the vast majority of the year,” Guérette said. “We also know, however, that Saskatchewan is growing at its fastest pace ever. So that means people are still coming and if they’re still coming, they still have to live somewhere.“
She said that affordable options for newcomers are quickly slipping off the market.
“We talk about a housing crisis, but it’s an affordability housing crisis. You know, if you have the funds, you can go and build your home today and do that and find a builder. It’s really the lower end of that housing continuum, the affordability piece.“
Guérette said she hopes that in 2024, the federal and provincial governments will aid homeownership and make it affordable so it can succeed at a faster rate across the country.
“We have, you know, federal institutions that actually don’t necessarily promote homeownership. I don’t agree with that. Homeownership is at its worst.“
The raised housing benchmark left little on the table in 2023 for other things, like buying groceries.
A food insecurity study conducted by Statistics Canada found 18 per cent of Canadian families were food insecure in 2022.
Sylvain Charlebois, an agri-food expert at Dalhousie University, said it’s due to increased expenses.
“Consumers are spending less on food — not necessarily because of food prices. It is essentially because of shelter costs.”
As a result, Food Banks Saskatchewan said it noticed a demand increase of 36 per cent across the province.
“Canadians have actually been proactively looking for ways to save. They have been visiting discount grocers much more frequently. Non-traditional food stores like Giant Tiger, Walmart even Dollar Stores are becoming more popular for people looking for better deals,” Charlebois said.
He said costs might be easier to manage in 2024, predicting the country’s food inflation rate to drop slightly from 5.9 per cent.
He also noted that Canada has one of the lowest food inflation rates in the world.
“It started with supply chain issues, Ukraine. The Ukrainian conflict really has made many inputs more expensive,” Charlebois said. “The inflated input prices are behind us now, which is helping manufacturing and distribution as well. We are expecting more investments and more deals as we go through the fall and winter. Some products are cheaper now than in August.”
University of Regina economics professor Jason Childs said the possibility of a recession is not out of sight for 2024.
“The Bank of Canada is, of course, aiming for that nice soft landing where we get demand back in line with supply without causing a recession. So far, they’ve avoided the most technical definitions of recession, but that risk is still very real.”
Childs said that if the province doesn’t experience a recession, more strikes and wage demands may be on the horizon.
“We’re likely to see that continue as workers start to demand some gains to get back to their standard of living and the real paycheques that they were getting before. One of the things with inflation is that it erodes your paycheque.”
He said that when workers demand more money, employers have no choice but to raise their prices to keep up.
“You get locked in this loop,” Childs explained.
He said the best thing people can do right now is to start saving for the future.
“Don’t be too timid, don’t be too scared, but start saving now. Put a little aside. Make sure you’ve got that cushion. Don’t overextend yourself in terms of credit and stay away from the payday lenders if you possibly can.”
— with files from Global News’ Craig Lord.
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