A new report from the Parliamentary Budget Officer says inflation and rising interest rates have eroded the purchasing power of Canadians since 2022, particularly for low-income households.
But the richest households benefit from increased purchasing power.
Parliamentary Budget Officer Yves Giroux said government transfers, wage increases and net investment income have helped the disposable income of high-income households outpace inflation since 2019.
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The report said the investment income of the richest 20% of households grew faster than their interest payments, leading to higher inflation and an increase in their purchasing power in 2023.
For other households, the average increase in interest payments was greater than their investment income last year.
As a result, the purchasing power of households in the third and fourth quintiles experienced stagnation, while households with the lowest incomes experienced a decline in their purchasing power.
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