Consumers are being forced to change their spending habits as prices for essential items such as food and gas shoot up, says a new statistics Canada inflation report.
The report showed consumer prices increased 3.3 percent over the 12 months ending in April, as energy prices surged and store-bought food rose by 3.7 percent. The most affected food items were staples such as meat, bakery products, and fresh vegetables.
But gas prices were the main culprit by far, jumping 26.4 percent since last year. Electricity costs increased by 7 percent and fuel oil went up a whopping 32.4 percent.
A nationwide Nielsen Company survey also revealed Canadians are now spending almost the same amount on fuel as on food. Monthly gas expenditures were three-quarters that of grocery bills.
Eighty-six percent reported changing their driving and shopping habits to accommodate the price increase.
Jason Toews, founder of Gasbuddy.com, a website that helps consumers find the best deals on fuel across North America, says people are desperately trying to cut back on driving costs.
“People have been taking public transportation more, riding bikes more, walking to work or car pooling. A lot of people are doing that,” he says.
In Canada, as of Wednesday, May 26, Vancouver had the most expensive gas prices at 135.2 cents per litre, while Edmonton boasted the cheapest at 116.4.
A recent study conducted by Ottawa-based research company Abacus Data found that nearly 40 percent of Canadians said rising gas prices had “really hurt” their budget.
The activities most often sacrificed to save money were found to include non-essential driving, vacations, general household spending, and entertainment.
The poll also found the majority of Canadians blame “greedy” oil and gas companies for the price increase.
Almost 8 in 10 respondents “strongly support” (52 percent) or “somewhat support” (24 percent) government intervention and regulation of the gas industry.
But Toews was quick to warn that regulation doesn’t necessarily mean lower prices at the pump.
“One of the things that happens when government starts to regulate gas prices is gas prices actually start to go higher. ... We’ve seen this in provinces like Nova Scotia, Newfoundland, and P.E.I. The gas prices actually go higher, especially in the summer.”
Toews says regulation would lead to increased prices at the retail level, which would ultimately fall on consumers.
Industry Minister Tony Clement said recently that he had received 500,000 letters from Canadians asking for answers on climbing fuel prices. He has now called an investigation on the matter through the parliamentary process.
“I will be asking refiners, distributors, and retailers to come to Ottawa to appear before a parliamentary committee and explain their pricing methods to Canadians. Members of Parliament will get the chance to ask them the common-sense questions we’ve been hearing from Canadians,” he said in a statement.
But there may be a brief reprieve for consumers, says Toews, as gas prices appear to have peaked temporarily.
“They peaked right around 134.3 and since then they’ve actually come down nationally. Even today they’re at about 127.5. I think that will come back down a bit ... into June. But the unfortunate thing is that we will probably see that coming back up again in July or August.”
Toews recommends consumers “fight back” by finding the lowest prices through services such as Gasbuddy.com, because the demand for low prices will force gas companies to remain competitive.
Friends Read Free