With the introduction of carbon pricing in some Canadian provinces, and the weakening of the loonie, prices for everyday goods and services across the country could be impacted in the coming year. The Conference Board of Canada鈥檚 chief economist, Craig Alexander, talked to CTV鈥檚 Your Morning on Wednesday about what will cost Canadians more and what will cost them less in 2017.
Gas:
Alexander said the introduction of carbon pricing in provinces such as Ontario and Alberta on Jan. 1, has already resulted in even higher prices for gasoline already under pressure from the rising cost of crude oil in the past year. Alexander said the Organization of the Petroleum Exporting Countries鈥� (OPEC) move to cut oil supplies could also increase prices at the pumps .
Alexander said Canadians across the country will have to shell out a little more for gas in 2017, but that it won鈥檛 be a dramatic increase.
鈥淚 think that oil prices are still going to remain below 60 dollars a barrel,鈥� Alexander said. 鈥淚 think Canadians will probably a pay little bit more on gasoline in the coming year but it鈥檚 probably going to be a few more cents than what they鈥檙e paying right now.鈥�
Groceries:
Alexander said the ongoing strength of the U.S. dollar, combined with the weakening of the loonie will result in higher prices for food imports, such as fruits and vegetables, in the coming year. He said the U.S. Federal Reserve will likely raise interest rates further, which could keep the U.S. dollar strong and weaken the Canadian dollar further.
鈥淚 think that food prices, conservatively, are going to rise about 3 per cent in the coming year,鈥� he said.
Housing market:
Alexander cited the federal government鈥檚 introduction of new rules on mortgage lending and mortgage insurance as factors that will contribute to a cooling of housing prices, particularly in hot markets such as Toronto and Vancouver. He said that Vancouver is already experiencing a bit of a correction and that Toronto will likely still see some price growth in 2017.
Alexander said Canadians will most likely be disappointed that mortgage rates will increase; however, he stressed that the cost of borrowing will still be incredibly low.
Furniture:
It鈥檚 not all bad news for Canadian consumers. Alexander said furniture prices will likely decrease in the upcoming year. He said the cooling housing market will result in discounting at furniture outlets.
Clothing and footwear:
Along with furniture, Alexander expects clothing and footwear prices to decline a little bit in 2017. He said, due to the weak loonie, the discounts may not be as big as Canadians have seen in the past, but shoppers should still expect minor decreases for shoppers.
鈥淚t (the Canadian dollar) won鈥檛 be driving up prices, but it will restrain how much prices decline,鈥� Alexander said.
Electronics:
Similar to clothing and footwear, Alexander said Canadians may see minor price drops for electronics. He clarified that that doesn鈥檛 include the latest gadgets with all of the newest features. In general, electronics should be slightly less expensive across the country, according to Alexander.
In summary, the economist said inflation will pick up in 2017, and will probably go from one per cent last year to two per cent in the next year. Alexander said costs will likely head higher but that price growth will still be moderate.
