519-646-22221979 – 2024 cost of living
The cost of living has changed between 1979 – 2024 but by how much? I chose these two dates because I returned to Canada in 1979. For this discussion I am going to use data from 1979 and run it through the Bank of Canada’s Inflation Calculator to adjust the prices to what they should be if inflation were to be even.
Gasoline:
The price of oil in 1979 was $15.85 per barrel, today it is $67.47. However, the price of crude today, adjusted for inflation should be $63.91 so that is pretty close overall. However, gasoline in 1979 was about 24 cents per litre, which adjusts to 97 cents in todays’ dollars – so gasoline, at $1.47 per litre, is overpriced by about 40%.
Housing:
The average Ontario house price in 1979 was $70,000 after adjusting for inflation the price today should be $282,260. Today, the average house price in Ontario is $877,300. Accordingly, the cost of housing in Ontario is 300% higher than it should be.
Income:
The average income in Canada in 1979 (calculated in 1995 dollars) was $22,986 after adjusting for inflation that would be $42,389 in 2024 dollars. The good news is that the average income for 2023 was about $57,000 so there was a bump of about 26%.
Taxation:
Taxation in 1979 was about 30% of income, by 2024 it is very close to 50% so, gains made in income were completely gobbled up by taxes.
Education:
According to Statistics Canada, in 1979 dollars it cost $636 (or $2,553 in 2024 dollars) to study law in Canada, in 2024 the cost of a law education has blossomed to $17,875 or an increase of 700%. The reason there were fewer post secondary degrees in 1979 compared to today, is they were merit based.
Debt:
Since 1979 the use of Debt has increased by a magnitude of many thousands of percentage points. Canadians are global leaders in all the wrong things, the worst of the worst – and that is certainly true of consumer debt levels. Most people who are registered homeowners in Canada owe more on their mortgages today that they paid for them in the first place.
There are about 3 bank issued credit cards, from Canadian banks, in circulation for every adult in the country, and the amount of charges on those cards each year is roughly equivalent to the total amount of after tax income in the country.
Summary:
Clearly we can see that while costs have inflated across the board by an aggregate of thousands of percentage points, but incomes haven’t kept pace. So how do Canadians make it through? DEBT!
Question statistics:
We hear that 21% of income earners earn more than $100,000 per year. That sounds great until we look behind the curtain and realize the reference is being made to “full time” income earners. In Canada there are only around 16 million full time income earners and about 45 (+) million residents. In other words about 3.3 million Canadians or 7% earn more than $100,000.
Interestingly too, as with the definition of so many other things in the recent past, the definition of “full time” employment has changed – it used to be 40 hours per week in one job. Today, for statistical purposes, you are counted as a full time employee if you work 30 hours a week or more, and that can be through a series of gig jobs.
Household income is a statistic that bureaucrats prefer to individual income data because combining the incomes of everyone living at the same address creates the illusion of higher income.
Having said all of that, it is easy to identify the cause of financial problems in our society, but exceedingly difficult to fix any of them, without a major political paradigm shift!