Are things getting cheaper in Canada?

One of my tiresome complaints is that the prices of the things I buy are always increasing, and that the Consumer Price Index (CPI) does not reflect my basket of expenditures on goods and services.  Sometimes the CPI is reported while excluding energy and food which seems strange, at least as far as my budget is concerned. Then one day, while staring at my computer screen, I realised that much of what I was watching was actually free, or at least only required owning a computer and paying for internet service.

I read newspapers, magazines, academic periodicals and books for free; listen to music, the radio, watch TV and videos for no charge; have free access to Wikipedia, an online substitute for owning a set of the Encyclopedia Britannica; register and take online courses for no charge; shop, pay bills, trade shares and do banking online; send and receive messages to and from anyone with an internet service both next door and the other side of the world.

The list goes on. In each case, there is often someone trying to get me to pay for a version of what I access or how fast I receive it, but a little willpower on my part resists these temptations where possible. A weakening might be Netflix at C$8 a month for the Canadian service, as opposed to relying on free YouTube postings. US Netflix has 14,000 films as opposed to 1,000 with the Canadian version; a web search (for free) will show how Canadians can access the US service for an additional $50 a year.

Many books are available for free, although less so for recently published books. A first stop is the public library where hard copies are available when not previously loaned out. But now libraries offer e-book and audio editions, which can be downloaded at no cost without leaving home.

Other major home budget items are food, clothing, shelter, travel, healthcare, education and taxes. While each deserves careful analysis,and will be different for a 20 or 30 year old than for an 80 year old, consider the following:

  • Food can be purchased in its original form or with different degrees of processing. Processed food items are more expensive even after the raw food has been cooked at home.
  • Restaurant meals vary in cost depending on a combination of the food, cooking and ambiance of the establishment. Even with coffee shops, food and beverage items vary in price in a Tim Hortons versus a Starbucks.
  • Clothing can be bought online and delivered without the shopper leaving home. Prices tend to be competitive, the choice enlarged and the transaction costs reduced.
  • Home ownership costs depend on mortgage rates which consumers cannot control, but which are currently low. Maintenance costs are often hard to predict, but are typically reasonable for newly built homes and apartments.

Much could be written about the changing costs of the other listed items like travel, healthcare and education where there are more and less expensive ways of consuming and paying for these services. And where the characteristics of the service have changed over time, it becomes difficult to say how much the cost has risen or fallen.

 

My sense is that aside from the price of gas, which is viewed daily in a city (especially over long weekends) and has risen over the past decade, the items which have increased in cost are healthcare and education. But since these are often supplied by government, their cost is paid for out of taxation and understanding the implications requires entering a maze of the ways in which governments raise money at the federal, provincial and locals levels. In a future posting I will discuss how sellers work to raise prices and what, if anything, consumers can do about it; and whether published statistics on GDP and trade reflect changes in the way services are produced and traded.

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One Response to “Are things getting cheaper in Canada?”

  1. Reviews Says:

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