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EDITORIAL: Inflation rate affects buying power

Prices have risen over the past year
(Black Press Media File).

Prices have risen over the past year.

The latest consumer Price Index information, released by Statistics Canada in mid-January, showed the Consumer Price Index rose 3.9 per cent on an annual average basis in 2023.

The Consumer Price Index is used to measure overall changes in consumer prices. It is used as a measure of inflation.

The 2023 increase is less than the 6.8 per cent increase in 2022, but comparing last year’s figures with a year earlier will not tell the complete story.

The 2023 increase is the second-highest annual average increase since 1991, following a 6.8 per cent increase in 2022. The 2022 increase was the highest seen in more than 40 years. In some earlier years, price increases have been minimal.

In addition, while costs have increased overall, fuel and energy prices have been decreasing. If energy costs are excluded, the increase would be 4.5 per cent.

If wages and pensions were indexed to the Consumer Price Increase, the year-over-year changes would have little meaning to consumers. Their buying power would remain steady.

In British Columbia, the minimum wage is indexed to the rate of inflation, and as a result, the last increase, on June 1, 2023, was in line with the increase in costs. However, this increase does not necessarily show in all wages, nor does it show in pensions for retirees who are often living on fixed incomes.

Those who did not receive a wage increase and those who saw increases less than the Consumer Price Index will have less buying power than they had a year ago.

Rising prices also affect businesses, who must pass the increases on to their customers in order to balance their budgets. The same holds true for all levels of government, where inflation affects the amount of money needed to maintain expected levels of services.

The Consumer Price Index numbers for 2023 show inflation is affecting Canadians. This affects all Canadians. As a result, the figures will demand a response.

It is not enough to simply watch the trends as prices increase.

— Black Press