Inflation is the general increase in prices over time which results in the purchasing power of currency depreciating in value. In other words, people have to pay more for less.
Over the last three years, we have seen some of the highest inflation rates since the early 1980s, which can be attributed to an imbalance of supply and demand for consumer goods. COVID-19, the war in Ukraine, and profiteering from large corporations have all added to the increase in prices currently seen today.
To further compound the problem, Canada’s consumer market has become increasingly monopolized with three main companies holding 75% of the market share. Increasing competition by facilitating international companies entering the Canadian market is one way to address this at a larger scale, and this can be facilitated through federal policies, laws and agreements.
At an individual level, people can build financial resiliency through things like reducing spending and debt as well as investing in assets and/or the stock market. However, inflation doesn’t affect everyone equally– those with lower and/or fixed incomes can be particularly vulnerable and may be unable to do these things.