May Inflation Rate | General financial discussion | Discussion forum

Loonie, it is timely that you ask for a Seniors CPI. StatsCan anticipated your wish and has delivered a first pass, albeit with a few weak points https://www150.statcan.gc.ca/n1/pub/62f0014m/62f0014m2019004-eng.htm Here is the pertinent data

During the studied period, the Consumer Price Index (CPI) and the CPI-S showed very little differences in trends, which may imply that the sub-population of seniors and the Canadian population overall are facing the same general inflation. In fact, the CPI-S increased by 11.0% from January 2013 to August 2018, compared to 10.6% for the CPI. Over the period studied, the CPI-S showed an average annual increase of 1.7% and the CPI, 1.6%.

Among the eight major components, Shelter contributes the most, on average, to the observed differences between the CPI and the CPI-S. As well, seniors tend to spend relatively more on Health and personal care and less on Transportation and on Recreation, education and reading as compared to the whole population.

Although the CPI-S was built using a robust methodology, there are a number of limitations given that its compilation relies exclusively on the data collected for the calculation of the CPI:

Thanks for the info, AltaRed.
From my perspective, it proves my point. Shelter and Health costs are necessities, whereas the things that Seniors spend less on such as recreation and new clothes are not as essential. I also note that the cost of Shelter for seniors is rapidly increasing, according to their chart.
When you couple this with the fact that the average senior's income is not very high, the impact of these increasing costs is obvious.
Further, CPI for Toronto is higher than the national average. John Tory bases his tax increases on the rate of inflation for Toronto, not the nation, so they too are higher.
Yes, there are some flaws here, but the pattern seems undeniable, that the cost of necessities for seniors is out of proportion. It was essentials that I mentioned above - things I can't escape, like my mandatory city garbage bins, utilities, insurance, health care, property taxes, assisted living costs, etc. Property insurance has gone up astronomically due to flooding risk even though no floods, and I imagine will be even worse next year and in years to come.
One of the major flaws with this index is that it assumes we all participate at about the same levels in the same purchase areas as others. This is not the case. If you're poor, you must concentrate on necessities.
Even as it stands, it shows that seniors are paying more. At the very least, even this reported difference of 0.4% might give pause to reconsider basic income supports.

Loonie, it is not reasonable to have a series of CPI indices for seniors depending on what income group they fall in, so just like regular CPI, we all have to work off the average person, whatever that average person might be and adjust accordingly.

Seniors who own homes are better off than those that rent simply because housing costs are a much lower percentage for home owners than tenants assuming we don't apply an opportunity cost to the capital sunk into a house.

I think we will start to see waste management costs start to increase exponentially, especially if we really get serious about packaging and recycling. Example would be banning of single use plastics and higher deposits on recyclable containers to help ensure they are truly recycled.

I ran my numbers, same as Loonie, and got 19% cost of living increase in 5 years, so just under 3.5% compounded annually.
Biggest hit was groceries, increase by 50% in 5 years, and biggest decrease was cost of TV+Internet, down by 43%.

I do believe that 3%-4% inflation for individual household is manageable.

On a side note, my cell phone plan costs me $9/month (after tax), no data plan. I own very old blackberry with replaceable battery. When battery died, I bought replacement battery on Amazon for $10.
As much as I envy what modern expensive smartphone with voice+data plan can do, I just don't need it. Quality of voice calls is surprisingly good on that old blackberry I own, and it can even check emails and browse Internet when it connects to WiFi.

AltaRed, I never suggested we should have "a series of CPI indices for seniors depending on what income group they fall in."
The issue is the cost of necessities and fixed costs, and the ability to pay for them.

50% of seniors have incomes below about 27K, and a great many of them are single people. This is by far the lowest median income of any age group over 25, and of course 27K is the upper limit of that half.

The chart clearly shows galloping costs in necessities such as housing; and Alexandre reports similar in food.
I'm sure that the one person Bill knows of who managed to get a subsidized room in a retirement home was glad of it but this is not available to most people. The wait list for a city-owned subsidized seniors apartment in Toronto is well over 10 years, and a non-subsidized one is 5 years.

Of course, there are no simple answers to all of this, but it's good to have some data to start from.

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The income stats come from Statscan. I've closed the window now but think it was 2017.

Where do you get the data to support your opinion that "the vast majority" of the poor are so "of their own making"?

Costs of necessities are hard numbers. They are not about "expectations".
Income/assets minus costs = money in pocket or not having enough money.
I would like to see a CPI that reflects the bottom-line necessary costs of living, which the current one does not. We can keep the old one too, as that seems to be the yardstick for the "middle class" which politicians are so interested in. This seems to be what they mean by "average".

CPI is not just one set of figures. It is already broken down by province, city, and perhaps other things that I am not aware of. That's because costs vary across the country. In calculating property taxes in Toronto, for example, the mayor uses the CPI that is specific to Toronto in order to claim that he has not raised taxes more than inflation (and then adds uncontrolled fees to that). Yet wages and CPP don't go up in tandem at this local CPI.
There are also other demographics by which CPI varies which have not traditionally been calculated. What's the use of it if it only applies to a mythical "average" anyway, and not real costs? One has to wonder.
I'm not up on what criticisms have been levelled in the past, but if it doesn't reflect people's reality, then it's unreliable.

One-third of Canadian households are renters. Lots of people can never afford a house, never mind expect to get a bigger or better one. Even those who buy are not necessarily in houses, as many are in condos.

canadian.100 said
I have tried to find support for the assertion that 50% of seniors have incomes of less than $27K. I have been unable to find that.
…

Try the Statistics Canada dataset Income of individuals by age group, sex and income source, ….

For 2017, the median income was $28,400 for those 65 years and older in Canada. The average for the same group was $40,000.