Statistics Canada reports the annual inflation rate last month fell to 0.4 per cent, its lowest level in almost 15 years.
B.C. has had the lowest inflation in Canada for the past seven years overall -- that's what the big numbers say -- but people ask why they don't see it in their wallets or bank accounts. It may be all because of where you spend your money.
For example, gasoline prices are way down compared to April last year -- so you are saving about 20 per cent every time you fill up. Those buying a new vehicle are paying on average over 8 per cent less. But if you take public transit your fares haven't dropped.
Natural gas to heat your home is cheaper unless you are locked in to a long-term plan then you haven't seen the decrease.
Home prices are lower too and CMHC expects them to keep falling. That makes it cheaper today to own a home but renters overall are paying more than a year ago.
And what about food?
Across the board in B.C. food prices are about 10 to 15 per cent higher but restaurant prices are up just four per cent.
So you can see that where you spend your money affects whether you actually feel the full effects of inflation. If you are a renter who takes the bus -- your costs are up. Someone who drives a gas guzzler is feeling relief.
We hear talk of governments fearing deflation. That's where prices fall instead of rise.
In order for deflation to be serious, consumers and business have to have the expectation prices will continue to fall and so they don't buy anything. Business grinds to a halt and that causes a depression.
But electronics prices have gone down for at least a decade and it hasn't hurt sales, even though people know -- if they wait -- they will get more for less -- whether its a digital camera, TV, Blu-ray player, computer or iPod. But for deflation to be serious it would have to happen across all sorts of goods.
