POLICY BRIEF - INCOME SUPPORT, - Volume 15:22 July 2022 - INFLATION, AND

Because they dominate the budgets of households with low income, and because they represent the cost of meeting what are universally understood to be the most basic of needs, we focus on the cost of shelter and the cost of food. [...] We then measure the impact on those budgets of the rates of inflation in the prices of shelter and food being experienced currently and expected to be observed in the next couple of years. [...] The implication is that if the prices of food and shelter rise faster than the prices of other goods and services, the CPI will provide an underestimate of the rate of inflation as it is experienced by individuals and families with low income. [...] Unless those provincial governments who fail to index incomes make a commitment to introduce frequent ad hoc additions to income, we should expect the effects of inflation to force individuals and families to respond in ways such as the following: Squeeze the Residual Budget The calculations in Tables 5, 6 and 7 are based on the assumptions that the quantity of food purchased, and the size and qua. [...] reflect the opinions of the supporters, staff, or The mission of The School of Public Policy is to strengthen Canada’s boards of The School public service, institutions and economic performance for the of Public Policy.