Families are in a “recession”… but not Minister Eric Girard

The Legault government's financier, the finance minister, Eric Girard, may well say that Quebec is not in recession, but the minister's reassurance speech is of no use as a large portion of Quebec households are dragging the devil by the tail. .

It is believed that these economically distressed families have literally become poorer due to the rising cost of living. And they are right. Moreover, they are not the only ones who have lost purchasing power. As proof…

Of the 24 typical households, 20 saw their disposable income (in constant dollars, i.e. after removing inflation) decrease in 2023 compared to 2022, ranging from $700 to a few thousand dollars. By typical families, we refer here to eight types of families and three income levels (lowest: 25^e Percentage/Average: 50^e Percent/High: 75^e percent). Categories: Single Individuals, Couples Without Children, Couples with Children, Single Parent Families, Single Seniors 65 to 69, Senior Couples 65 to 69, Single Seniors 70 and Over, 70 and Over Elderly couples.

I rely on this study to say that 20 out of 24 households will become poor in 2023. Evolution of purchasing power of Quebec households Published last week by the Research Chair in Taxation and Personal Finance. Researchers Luc Godbout, Suzy Saint-Cerny and Frédéric Halle-Rochon compared the annual disposable income earned by various typical households from 2019 to constant 2023 dollars.

recession”

According to data from 3^e In the quarter compiled by the Institute of Statistics, Quebec's real GDP declined for just the second consecutive quarter. Therefore, technically speaking, we are in a recession. But according to Minister Eric Girard, this is not the case.

“But it is too early to declare that Quebec is in recession, because the decline in economic activity is not widespread. In fact, many sectors are showing growth, including employment, consumption and disposable income,” he continues, adding that he knows the situation is difficult for many Quebecers.

Daily…

Let's set the record straight. Although we say inflation has fallen to just 3.6% over 12 months, households have a deep sense of it being higher.

In fact, the most destabilizing factor for the portfolios of low- and middle-income families is rising prices that hurt housing and food. You should know that housing accounts for less than 27% and food accounts for 19% in the consumption basket.

home

Let's start with housing. In the last 12 months from November 2022 to November 2023, housing costs in Quebec recorded an average increase of 6.8%. More specifically, rents increased by 7.4%.

Among homeowners, the increase was 8.3% over the past 12 months. Another increase that is not against insects is 11.4% in the cost of home insurance and mortgage insurance. When it comes to the rising cost of mortgage interest, its payments have increased by 29.8% over the past year.

the food

Now let's move on to the other big household expense: food. Every time we go to the local grocery store, we feel that the prices of all the products have gone up significantly. So much so that people are more wary of deals offered by merchants!

According to the most recent inflation data from Statistics Canada, the total food basket has increased by 5% over the past 12 months. The products that registered the greatest increase were: fresh or frozen beef (+9.5%); Butter (+8.5%); fresh fruits (+9.7%); canned vegetables (+7.5%); edible fats and oils (+9.2%); Food purchased at restaurants (+6.4%).

For 3 years

Inflation in Quebec rose 16.5% over the three-year period. Housing increased by 19.4%. and food increased by 22.3%.

A staggering 4.75 percentage point increase in the Bank of Canada's key rate and its devastating impact on mortgage loans, personal loans, business loans, credit cards, bank advances. Many Quebec households are on the brink of an economic downturn.