Consumers hit as costs go up
The ship that was stuck in the Suez Canal for almost a week did more than captivate social media. It created a logjam for goods being shipped through this critical link, which are expected to create global shortages, one of which is toilet paper. However, since Canada produces most of our own TP we can be confident of our supply, but we do import some and there are no guarantees domestic production keeps prices down if they rise around the globe.
The pause in shipping is not responsible for all the inflationary pressures being experienced. It is more of a symbol for a problem that has been brewing in the background for a while. To put it simply, production has been interrupted, shipping has been interrupted and we are globally dependent for a lot of our consumer goods and food as well as for setting the price on items we produce ourselves. That means we must wait longer for some goods to arrive and they will likely cost more as a result.
But it’s not just international goods experiencing sharp increases in price. Our own domestically produced lumber is getting expensive with simple 2x4s costing more than double what they did before the pandemic. This raises the costs of home building, renovations and any project that is lumber dependent. Lockdowns and curfews are partly responsible as they create gaps which fuels demand and raises prices, but there have been pinch points in all manner of supply chains over the last year.
With inflation threatening to gain momentum, the next concern may be higher interest rates. That is seen by many economists as one of the best levers to control inflation, but after years of cheap loans it is reasonable to wonder if consumers are prepared for higher rates. Mercifully, there are ways the federal government can help alleviate pocket-book pressure through social investments. To do that will require a change of focus on whose fortunes are being attended to.
For decades we chased a mirage, investing in economic levers that didn’t perform and concentrated wealth. The antidote to that will involve investing in those at the bottom of the economic pyramid through social programs that tackle problems like a lack of housing or negative outcomes from affordability issues. This is why New Democrats have pushed governments for years to invest in measures like affordable housing, pharmacare, and to ensure basic needs are met such as having a telephone which makes it possible for individuals to find work in the first place.
The pathway to home ownership is one that was already seen by too many young people as impossible. Inflation in building products makes affordable housing seem like a dream, which it will remain without a federal investment and some important measures. Federally, we can also rein in foreign speculators and money launderers that drive up housing costs. We can reinstate 30-year mortgages to minimize the monthly burden, and we can invest by building affordable housing units to ensure there are options for those with less means.
Programs like pharamacare address inflation at the consumer and public level by ensuring those who cannot afford their medication aren’t ending up in hospitals and emergency rooms with bigger, avoidable issues that cost far more than medication. The savings from bulk buying would help governments find resources for other needs as well. As provinces struggle to maintain delivery of health care, a strong federally led pharmacare program would be a game changer.
With inflation on the march and the spectre of higher interest rates on the horizon it is time for the government to investigate economic options that help those who will be further stressed under tighter budgets. We see how billions can be found in days for pipelines; it is time for a similar commitment to ensuring affordability.