EDITORIAL: High inflation warns against high taxation

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Regardless of whether it’s international or domestic factors — or a combination of both — that are fuelling inflation, it was a tough year for Canadian families in 2021 and it’s going to get tougher in 2022.

This reality should serve as a warning to federal, provincial and municipal governments that they cannot look at their tax increases to Canadians in 2022 in isolation from the rapidly increasing cost of living families are facing.

One example of fuelling inflation is the cost of our most basic necessity — food.

According to Canada’s Food Price Report, an ongoing research project by four Canadian universities, food prices will rise by up to 7% and by no less than 5% next year — the largest annual increase since the inception of the report 12 years ago.

It predicts an average family of four will pay $14,767 for food in 2022, up $966 from 2021, when prices were already inflated because of the pandemic.

Food price increases in Ontario, Alberta, British Columbia, Saskatchewan and Newfoundland and Labrador are expected to be higher than the national average in 2022, with lower price increases in the remaining provinces.

This is on the heels of this year’s increase in food prices, which the report says rose by an average of 3.9% in 2021 (4.2% excluding restaurants) to $13,801 for the average family.

What’s worse, the authors of the report predict there’s no end in sight to substantial increases in the cost of food, fuelled by supply chain and labour shortages caused by the pandemic, climate issues and carbon taxes.

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“It’s important for consumers to understand that food prices have been going up for some time and there’s no turning back,” said Prof. Sylvain Charlebois, project leader of the report compiled by researchers at Dalhousie University, the University of Guelph, the University of Saskatchewan and the University of British Columbia.

That will lead to increased food insecurity for Canadians, the report predicts, greater use of food banks and increasing thefts from grocery stores, especially for meat, cheese and over-the-counter medications.

Canada’s annual inflation rate in October rose by 4.7% — the highest increase in 18 years — with inflation expected to hover around 5% for the first half of 2022 before falling to 2.1% by the end of the year.