From coast to coast, growing anxiety over rising living costs has propelled affordability to the top of the agenda in Canada’s federal election.
Kitchen-table economics remains firmly ensconced as one of voters’ top five priorities even as concern over COVID-19, which had ebbed earlier in the summer, becomes more acute amid the spread of the Delta variant, according to a recent Ipsos poll conducted exclusively for Global News.
But affordability worries increasingly include two drastically different sets of issues. On the one hand, there’s the climbing inflation, which is forcing consumers of every age, income and political creed to spend more to fill up their tanks and grocery carts. On the other hand, a long-simmering affordability crisis spanning housing, childcare and higher-education costs seems to have reached boiling point, fuelling angst among younger voters especially.
How the federal parties respond to Canadians’ kitchen-table worries could have important implications for the outcome of the election, says Darrell Bricker, CEO of Ipsos Public Affairs Canada.
“It’ll be really an important issue for the prime minister, for the leader of the opposition, particularly the leader of the third party of the opposition, the NDP, and also the Green Party,” Bricker says.
Inflation raises 'bread and butter' worries
After lying low for a decade, inflation has reared its head as a political hot topic in the current campaign.
On Wednesday, after data from Statistics Canada showed the country’s inflation rate had reached 3.7 per cent in July — the highest since 2011 — Conservative Leader Erin O’Toole delivered jabs to both his two main political opponents.
Speaking to reporters in Quebec City, O’Toole said the Liberal government’s approach to the economy is fuelling the increase in prices, but also pinned blame on Singh, saying the Liberals and New Democrats “are the reason why there’s inflation.”
A variety of pandemic-related factors have pushed up prices in both Canada and the U.S., where the annual rate of inflation reached 4.3 per cent in July.
Inflation readings on both sides of the border are in part magnified by annual comparisons with the spring and summer months of 2020, when prices took a dive amid a global economic rout.
But the current bout of inflation is primarily the product of a mismatch between demand and supply, with consumer spending bouncing back from the pandemic faster than production and transportation capacity, according to economists.
Shortages of anything from lumber to semiconductor chips by car manufacturers have caused price spikes for anything from wood planks to used cars. At the same time, logistical bottlenecks and rising oil prices are driving up transportation costs for companies across industries, prompting some to pass on at least some of the increase to consumers.
In Canada, gasoline prices have climbed more than 30 per cent compared to the summer of 2020, an eye-popping increase that reflects both how cheap gas was a year ago and global oil production that has remained below pre-pandemic levels despite a rebound in global demand.
Pricier groceries and restaurant meals have also been squeezing Canadians’ wallets. Menu prices were up 3.1 per cent in July compared to the same month last year, an increase that experts say likely reflects both the rising cost of ingredients and country-wide labour supply shortages that have proved particularly severe in the restaurant industry.
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While prices at grocery stores rose only one per cent, the overall number betrays some steep jumps in specific categories. Prices for meat, for example, were up 3.1 per cent compared to July of last year, and prices of dairy products were up 3.5 per cent.
“It seems like every time I go to the grocery store it’s just that much more and I get that much less,” says Ron Treacy, a Winnipeg shopper who is now retired. “It’s almost like a luxury to eat healthy,” he adds.
And Canadians may be headed for an even bigger price shock at the grocery aisle in the fall, due to the potential impact of the summer fires and drought in Western Canada and the Western United states, some food experts warn.
“The last time, in 2013 and 2014, that we saw a significant drought in the western area of North America, we saw beef prices go up in the neighbourhood of 25 per cent,” Michael von Massow of the Department of Food, Agricultural and Resource Economics at the University of Guelph previously told Global News.
Younger Canadians focused on housing and long-term affordability crisis
While inflation has only recently resurfaced as a political issue, other living costs that largely elude Statistics Canada’s Consumer Price Index have come to the forefront in this election.
“The mood is anxious,” says Paul Kershaw, a professor at UBC’s School of Population and Public Health and founder of Generation Squeeze, a non-profit organization that advocates on behalf of young adults.
The angst about student debt, stagnating wages, skyrocketing home prices and high rents, as well as crushing childcare costs, has been there for years, Kershaw says. But it increased during the pandemic, he says.
Canada’s average national home price has risen a mind-boggling 32 per cent between July 2019 and July 2021, according to data from the Canadian Real Estate Association. And with small towns experiencing some of the steepest price increases, the pandemic has turned housing affordability from an issue largely limited to Vancouver and Toronto into a national emergency.
School and daycare shutdowns during the COVID-19 emergency have also thrust childcare to the top of the public debate.
And the virus has also forced Ottawa to temporarily suspend student loan payments and interest amid job losses that disproportionately hit younger workers in the initial phase of the pandemic-linked recession.
Squeezed by fixed expenses like high mortgages and rents, as well as student loan payments, many young Canadians have very little flexibility to absorb extra costs for things like food and transportation, says millennial money coach Parween Mander.
Fixed costs should make up no more than 50 per cent of monthly income, she says. “But I’m seeing a lot of my clients near or above that percentage, making affordability and flexibility with their paycheques a challenge,” she says.
With Gen. Z and millennials now making up 40 per cent of the population, addressing those affordability concerns has become a priority for all major parties.
Liberal Leader Justin Trudeau, O’Toole and NDP Leader Jagmeet Singh have all recently called Canada’s real estate woes a “housing crisis” on the campaign trail, while Green Party Leader Annamie Paul has called for “affordable housing for all.”
A $10-a-day universal childcare system is a key election promise for both the Liberals and the NDP, while the Conservatives have unveiled a plan for a 75 per cent tax credit for childcare expenses for lower-income families. The Green Party has yet to publish an election platform but has called for universal access to affordable child care before.
Across the political spectrum, the current campaign marks a clear change in tone on affordability issues that affect younger Canadians, Kershaw says.
“I do think we’re at a different place right now,” he says. “We are making progress, and I’m excited about that.”
— With reporting from Global News’ Joe Scarpelli and a file from the Canadian Press
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