How fast is your cost of living going up? Play our interactive game

Canadian politicians have been trumpeting the cost of living as a campaign issue well before the fall federal election. Major parties have introduced ad campaigns touching on the issue, with both the Liberals and Conservatives pushing the message that they can keep everyday life affordable and keep household costs from rising.

A big part of looking at the cost of living is watching the price of stuff — or the inflation rate. It's something the Bank of Canada is tasked with: keeping inflation "low and stable."

But while we talk about it all the time, do we understand what's actually happening?

• CBC Radio's new business and economics show, Cost of Living, airs on CBC Radio One every Saturday at 11:30 a.m. (12 p.m. NT) or online anytime at CBC Listen.

What is inflation?

The term generally refers to how much the price of, well, anything and everything goes up year over year. The higher the inflation rate, the less purchasing power for consumers over time.

What is the Consumer Price Index?

The Consumer Price Index (CPI) is how Statistics Canada measures inflation in this country. Over time, the agency compares the prices of a set basket of goods and services.

The central bank then tracks how those prices compare from year to year or month to month. The basket includes things as basic as groceries, such as meat and beer, but also include services like internet access and travel tours.

What does the Bank of Canada have to do with it?

The Bank of Canada tries to keep inflation at around two per cent, right in the middle of its target inflation range of one to three per cent annually. Why two per cent? That's low enough that prices are stable, but high enough to avoid the risk of deflation — when prices go down. Deflation may seem attractive — we all like low prices — but widespread deflation is bad for the economy, in part because it causes wages to go down.

The Bank of Canada uses the CPI to determine whether it's been successful at controlling the inflation rate. The central bank's main tool to do this is by setting its target interest rate, which influences what banks charge each other to borrow money amongst themselves. This in turn affects what financial institutions charge you to borrow money from them.

It's been fairly successful at keeping inflation steady over the past couple of decades.

But as evidenced by our politics — and by a CBC poll earlier this summer — people aren't feeling that's the case. 

Food

The cost of eating is something Canadians notice every day. However, different items within the category can balance each other out — for example, vegetables versus meat. Vegetable prices went up more than 15 per cent in the past year. 

It's the era of vegetables since the beginning of 2019.- Sylvain Charlesbois, Dalhousie University professor

"It's the era of vegetables since the beginning of 2019," said Sylvain Charlebois, a professor of food distribution at Dalhousie University.

"However, if you go to the meat counter or if you go to the fish [counter], the rate [of price increases] is not that high," explained Charlebois.

Despite the jump in veggie costs, meat prices only went up 1.85 per cent in the past year.

Essentially, different items can make you feel like you're spending a lot more at the grocery store — remember the cauliflower crisis of 2015?

But with so many items in your grocery cart, your overall food bill may not be skyrocketing quite as much as you think — unless you are a celery fan in 2019.

Child care

The average price of child care across the country has gone up at a higher rate than overall inflation for about the last 10 years. However, different programs and policies in each province mean that increase hasn't been uniform across the country.

"In Alberta … the wage cost of child care has increased faster than the rate of inflation," said Pierre Fortin, an economist at the Université du Québec à Montréal.

That likely has something to do with wages — which are higher in Alberta than elsewhere in the country.

As well, in provinces where child-care prices are more regulated, such as Quebec, Manitoba and Prince Edward Island, actual prices for daycare have remained lower than the rest of Canada. 

Cars

The price of a brand new vehicle has remained steady over the past 20 years. 

And that in itself means — despite costing tens of thousands of dollars — they've actually been getting cheaper year over year when inflation is taken into account.

"You can actually find a number of vehicles that have a deflated price today versus five years ago, 10 years ago, 15 years ago," said auto industry analyst Dennis DesRosiers.

You have more competition in the market today than ever.- Dennis DesRosiers, auto industry analyst

According to DesRosiers, that's got a lot to do with innovation and efficiency in the auto sector dating back to Japanese companies entering the North American market as far back as the 1980s.

"You have more competition in the market today than ever," said DesRosiers, who pointed out there's not a lot of room to increase prices when so many cars are competing for your dollar.  

"There's just under 30 brands competing. We're no longer in a [world of] GM, Ford and Chrysler controlling 90 per cent of the market."

Clothing

Your clothes are getting cheaper, too.

For most of the past 20 years, the overall price of clothing has either remained steady or been dropping. This can be tied, at least in part, to imports from countries, such as Bangladesh or China, where manufacturing costs are drastically lower.

As global trade was liberalized and opened to other countries, the price of clothes dropped. According to Statistics Canada, as late as 1998 the United States was the main supplier of clothes to Canada.

But in the following years, that changed. For example, clothing imported from Bangladesh tripled between 2002 and 2005, and that pattern has continued.

According to the World Bank, clothing imports from China made up more than 34 per cent of Canadian clothing and textile imports in 2017.

Tuition

The price of tuition in Canada has skyrocketed, relative to the price of inflation, over the past 20 years. 

However, much like child care, it is a different situation from province to province and is closely tied to politics. 

In Alberta, tuition remained largely stable, relative to inflation, for the last few years. Part of that is because that province's former NDP government put in a tuition cap tied to the CPI.

However, the national average has been driven up by other provinces, such as Ontario, where tuition is thousands of dollars more than Alberta or Manitoba.

A report from the Royal Bank last year showed that university tuition has been going up faster than inflation since the early 1980s. The gap between the rate of inflation and the rate that tuition goes up has only widened since the era of big hair and shoulder pads.

That same report indicated that government dollars going toward university has dropped by half since 1990.

How did your guesses compare to the real rates of inflation in the interactive game?
Let us know at [email protected] or @CBCCostofLiving