That's the question that has many Canadians stumped. The inflation rate is an arbitrary measure of the progressive increase in prices of goods and services used by the government to set monetary and other policies. Quoting the latter can give Canadians a false sense of security. Double digit increases in heating fuel costs, at the gas pumps and in our shopping baskets, have many Canadians feeling financial pain in their pockets, even with inflation at what is considered relatively low levels.
Costs steadily rise on other fronts too.
Mortgage interest costs, rents and telephone services are all up. Property taxes have increased in all but Manitoba, Quebec and the two northern cities of Whitehorse and Yellowknife. Being able to afford to stay in the home they love as taxes rise and energy costs rise is a growing concern for Canada's 3.9 million over age 65 since many of them are on fixed incomes. Without proper planning, inflation can erode purchasing power and cancel out your investment efforts. If the interest rate you earn on savings is less than or equal to the inflation rate, then inflation has cost you ground.