One does not have to leave Fort Frances to feel the effects of inflation. A trip to the grocery store, or a fill-up at a gas station is all that is needed to feel the effects of inflation. The Bank of Canada posted Canada’s May Inflation rate at 6.8 per cent. One would like to have someone or group to blame for seeing their buying power decrease. We like to play the blame game. Do we blame the grocery chains, the major oil companies, the banks for their large profits or our governments?
People would like to see a premier or prime minister wave a magic wand and see food shelves filled again, the price of gasoline back down to $1.50 litre, mortgage rates decline to 2.5% and the price of new vehicles back to 2016 levels.
As much as we would like those things to happen, we must look not just within our community, province, or country to solutions. Today in Australia the price for a head of lettuce hit $11. Shortages of fresh vegetables and fruits on store shelves in that country can be attributed to a huge drought that killed off billions of plants and revenue and now must be replaced by produce and fruit flown into the country.
Inflation is not just a problem within Canada or the United States, it is a global problem and will need painful global solutions.
In North America, droughts across much of the US have created shortages of produce and fruits that today are being replaced on our store shelves from further distances. Those shortages have grocers bidding more for those items and paying far more for transportation to bring them to Fort Frances.
The war in Ukraine has had a massive impact on the prices of cereals, breads, and flour in grocery stores. As one of the largest producers of grain in the world, the blockade of Ukrainian terminals has made getting those grains to countries needing them very difficult. That has caused gain prices to rise dramatically affecting many products we take for granted in our community.
Recent home purchasers with average Canadian mortgages have already seen their monthly payments increase by $430. In a report by Canadian Press in Monday’s Globe and Mail, one in four homeowners admitted to the Bank of Manulife Canada that they would be forced to sell their homes if interest rates went up again. One in five admitted that a rise in interest rates would have a negative impact on their lives.
Central banks around the world, to control inflation, will be raising interest rates and those increased rates will mean people with mortgages will be paying more. Those with car, truck or auto loans will be paying more. And those higher rates will pull money out of circulation and people’s pockets. Hopefully, it will not be as painful as the 17 per cent interest rates that baby boomers faced in the 1980’s.
Former publisher
Fort Frances Times