Inflation, interest eroded Canadians’ purchasing power since 2022: PBO

OTTAWA — A new report from the Parliamentary Budget Officer says inflation and higher interest rates have eroded Canadians’ purchasing power since 2022, particularly for lower-income households.

However wealthier households have seen their purchasing power rise.

Parliamentary Budget Officer Yves Giroux says government transfers, wage gains and net investment income have helped disposable income for higher-income households rise above inflation since 2019.

The report says the investment income of the wealthiest 20 per cent of households grew faster than their interest payments, leading to a net increase over inflation and boosting their purchasing power in 2023.

For other households, interest payment increases on average were higher than their investment income last year.

As a result, households in the third and fourth quintiles saw their purchasing power stagnate, while the lowest-income households saw their power deteriorate.

This report by The Canadian Press was first published Oct. 8, 2024.

Rosa Saba, The Canadian Press