In Canada, the cost of living is on an upward spiral with gas prices reaching record highs and food getting pricier with every trip to the grocery store.
“It’s just not something we’ve ever experienced in at any time in our past,” Dan McTeague, president of Canadians for Affordable Energy, said on the Roy Green Show.
What does this mean for Canada?
Gas prices were the the first to soar nationwide. Food prices are expected to follow suit.
In the next three to five months, Canada will see the prices of grain-based products rise. Next, animal proteins, according Sylvain Charlebois, Director at Agri-Foods Analytics Laboratory and professor at Dalhousie University.
“Meat counter products, followed by dairy,” he specified.
“It really depends on two things: How long this conflict lasts and how China will react because China is a big part of this,” Charlebois added, noting China’s influence on the global market.
Prices in Canada, both gas and food, will remain dependent on the conflict to the east, he said.
“Russia’s intent, I think, is to increase it’s influence around the world and there’s no better way to do it than to try and control agri-food growing conditions and prices around the world.”
In good times, Ukraine is a “power house” in the agricultural food sector, according to Charlebois.
“There’re lots of crops being grown there, especially wheat and corn,” he said, noting 25 per cent of all exports worldwide come from there.
In 2019, Russia and Ukraine were two of the worlds top exporters of wheat, according to the Observatory of Economic Complexity.
However, with the war raging on, ports in the Black Sea are being blocked and exporting has become increasingly difficult, Charlebois explained.
“Ninety per cent of what Ukraine and Belarus will grow, will actually have to come through that port, so that’s been a problem.”
Gas prices will also stay on the rise in Canada with Diesel, known as the “fuel the world runs on,” getting shorter in supply according to McTeague.
In Canada, between a quarter and a third of all fertilizer used by farmers is derived from diesel, according to McTeague.
“Farmers need fertilizers to grow more crops, increase yields, especially when crop prices are actually high, as they are now,” he said.
Additionally, farmers are still dealing with the supply chain issues related to COVID-19, which have plagued a variety of industries across the world for months.
Many producers are struggling to get machinery into their fields, with semiconductor and parts shortages that have delayed new car shipments also hitting tractors and other farm equipment.
At the pump, drivers will continue to see the price of gas rise, said McTeague.
“Sometimes drivers can find a bit of a break in the evenings, but with prices moving up by three, five, seven, 10 cents a litre, week over week, it looks like we’re going to have to, as it were, buckle up and hunker down for the next several weeks, at least,” McTeague said.
Around this time last year, the average gas price in Canada sat at 1.24/L. Now with over a 60 cent increase, this isn’t like anything Canada has ever seen.
“I think everyone is noticing higher prices at the gas pump,” said Charlebois.
Regardless where you are in Canada, gas prices are truly “beyond any expectations,” McTeague said.
— With files from Craig Lord