Why are so many Quebecers struggling from one paycheck to the next?

There is a long way to go when it comes to recovering purchasing power when we compare the increase in remuneration to that of inflation over three years.

Economically speaking, the Legault government has nothing to boast about.

That annual inflation in Quebec fell to 3.3% in January certainly bodes well. But I remind you that this 3.3% is in addition to the inflationary wave that hit us during the previous two years.

Compared to January 2021, according to data reported by Statistics Canada, I calculated that the consumer price index increased by 15.3% in Quebec.

During this same three-year period, average weekly earnings increased by how much in Quebec? By only 12.7%.

This therefore means that all Quebec households have seen their “real” purchasing power decline by 2.6 percentage points over the past three years.

  • Listen to the economy segment with Michel Girard via QUB :
Households are struggling

When we compare over three years the increase in the average remuneration of Quebec workers with the price increases they have suffered in “big” sectors such as food, housing and transport, we understand why so many Quebec households in royally squeeze from one paycheck to the next.

Housing

The “Housing” subindex has jumped 19.8% since January 2021. This is 7.1 percentage points than the increase in average household remuneration. When we know that housing alone takes up a little more than 28% of the basket of household consumption expenditure, we can guess that the big jump in the housing sub-index has a devastating effect on people’s wallets.

Homeowners facing mortgage renewal are devastated to see how their mortgage payments have skyrocketed. The “Mortgage Interest Cost” subindex has exploded by 44% since January 2021, or 3.5 times higher than the increase in compensation.

Another inevitable expense that hits the wallets of homeowners hard: the cost of home insurance and mortgage insurance recorded a jump of 24.5%.

Food

In the entire consumption basket, it is the “Food” sub-index which occupies, due to its relative importance, second place, after housing.

Not all households can believe how much their grocery bill has increased. Are they right to complain? Yes.

You should know that the “Food” sub-index recorded a significant increase of 22.4% over three years, almost 10 percentage points more than the increase in the average remuneration of Quebec workers.

  • Listen to the economy segment with Michel Girard via QUB :

Some foods climbed more: fresh or frozen beef (+26.8%); fresh or frozen poultry (+ 24.4%); butter (+ 25.6%); bakery products (+27.4%); cereal products (+23%); fresh fruit (+30.4%); canned fruit (+28.5%); edible fats and oils (+ 70.5%).

Slightly below the general increase in “foods”, we find eggs (+ 21.7%), vegetables (+ 21.7%), coffee and tea (+ 20.5%).

The price of L’essence

The slowdown in inflation growth in Canada in January is largely attributable to the 4% drop in gasoline prices compared to January 2023.

Here in Quebec, the drop in gasoline was only 1%. There is no reason to feel less exploited by the oil companies.

As proof, from January 2021 to last January, the gasoline sub-index increased significantly, even by 38.5%.

The “Transport” sub-index has recorded an increase of 18.7% since the start of 2021.


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