Higher mortgage and interest rates and a higher cost of living are making it harder for Canadians to afford to feed themselves, according to a professor of food at Dalhousie University in Halifax..In a recent commentary entitled “Rising Interest Rates and the Silent Hunger,” Sylvain Charlebois said the Bank of Canada’s interest rate hikes, now at 5%, have led to people spending less on food..“Despite prevailing inflation, the latest quarterly results from Empire/Sobeys/IGA indicate a $16 million decline in food sales compared to the corresponding quarter of the previous year. That’s right, $16 million,” said Charlebois..“Similarly, Loblaw/Provigo experienced a mere 3.1% increase in food sales over the past year, despite inflation consistently exceeding 9% for the preceding 12 months. Metro witnessed a modest 5.8% rise in food sales at their stores during the last quarter.”.Charlebois, who formerly taught economics at the University of Regina, suspects the numbers have more to do with people shopping smarter than eating out..“We are all actively pursuing special offers, forsaking national brands, and gravitating towards more affordable stores. While food prices are undeniably on the rise, discounted products can still be found. On average, supermarkets [offer] a range of 15,000 to 60,000 products, contingent upon the shopping locale.”.When housing costs so much, there is little room for much else, said Charlebois..“The past year has proven challenging for almost everyone due to escalating interest rates. Particularly, rental costs in Canada have surged in recent months. For instance, the average monthly rent for a one-bedroom apartment is presently $1,828, according to Rentals.ca. This marks a 13.03% increase over a single year, amounting to an additional $238 per month,” Charlebois explained..“Consequently, tenants of one-bedroom apartments must now bear a rent that exceeds the preceding year's by nearly $3,000. Analogously, the same scenario applies to two-bedroom apartments. The average monthly rent in Canada stands at $2,243, reflecting a 10.7% surge over a year, with approximately one-third of Canadians renting their residences.”.At least homeowners have it good, right? No, not if they’re still paying their mortgage..“Homeowners and mortgage borrowers face an even more dire situation. For those who acquired a $500,000 house last year, availing a 25-year mortgage with a 20% down payment, the monthly payments hovered around $1,700, subject to the prevailing interest rate," Charlebois wrote. "At present, these payments have surpassed $2,800 per month, constituting an approximate increment of $1,100 per month and nearly $13,000 annually.”.But homeowners can get through this, right? Well, maybe with difficulty..“Maintaining the same standard of living under such circumstances necessitates a considerable financial commitment. Moreover, over time, many households find themselves compelled to renegotiate their mortgages at significantly higher interest rates, an unsurprising outcome.”.Lowering housing costs is harder than finding grocery store discounts, Charlebois noted. The choices are to move out or take in a boarder..“The statistics underscore the financial strain endured by Canadians, held captive by the exorbitant costs of housing and consequently compelled to make compromises in their grocery expenditures,” wrote Charlebois..“Given the foreseeable persistence of rising rents and mortgage rates, the prevailing macroeconomic context compels us all to embrace a more frugal mindset.”.Charlebois said older Canadians have seen this movie before, in the early 1980s. The circumstances eventually gave way to better ones, but the change in spending habits lasted longer..“During that era, promotional products not only experienced temporary surges in popularity but became the norm for many households,” Charlebois wrote..“Although the prospect of abundance and indulgence will eventually resurface, it will undoubtedly require some time to materialize.”
