As you have probably already noticed, many things are expensive at the moment. CBC News looked at the cost of five items people buy on a regular basis and spoke to business owners and industry experts about what’s behind the soaring prices.
Mark Lamming, co-owner of Vancouver Bakery Purebread and Whistler, says their raspberry white chocolate scone now costs $5, up 5 percent from the previous $4.75 — while the cost of manufacturing has fallen by almost 18 percent increased.
People may be paying more for their favorite treats because the price of the ingredients has increased by about 10 to 15 percent every month for the past two years, he says. For example, the price of flour has increased by 70 percent, he adds.
“It just seems like the supply chain is really under pressure and demand has come back faster,” Lamming said.
Vancouver’s Kanadell Japanese Bakery also increased the price of its baked goods this month, says owner Keiko Nakanishi, as flour, eggs and butter are now more expensive.
According to Tony Llewwellyn, sales director at Snow Cap Enterprises Ltd., last summer’s prairies drought devastated wheat crops, reducing supply and driving up flour costs. Snow Cap is a BC-based food distribution company that Purebread and Kanadell source most of their ingredients from.
Dairy products are also more expensive because the cost of feeding livestock has increased, Llewwellyn adds.
Although the company primarily sources BC products, they occasionally source products from other provinces or from abroad. In this case, transportation costs – including fuel surcharges and service fees – also drive prices up. Llewellyn says shipping costs from North America and Europe have increased by about 200 percent, forcing companies like Snow Cap to pass the cost on to small business owners.
“There is nothing wrong with companies, but this is the wrong time to start charging these significant fees,” he said, adding that the fees that transport companies charge should be more regulated by the government to avoid price-gouging.
In January, Rick Ripoli of Stylus Made To Order Sofas spoke to CBC about the challenges furniture companies face, including rising material costs, supply shortages and longer waits for items to arrive.
Things haven’t changed, he says. Before the pandemic, a shipping container of raw materials from Asia cost Ripoli about $1,800. In March, he paid $15,000.
Trevor Heaver, professor emeritus at the University of British Columbia’s Sauder School of Business, says a spending spree in 2021 is partly to blame for the massive spike in shipping container costs.
According to Heaver, North American ports became severely congested because local workers could only work so fast.
“So it’s not just about how fast you can unload the ship, but also how fast you can move boxes of goods through the terminals and how many hours the warehouses are open to receive the boxes and what their capacity is to to empty and return the boxes.” he said.
Raw materials have also become more expensive, according to Ripoli: polyurethane foam, which is used to fill sofas, is a petroleum product, and as the price of oil has risen, so has the cost of the foam.
“Where price increases used to be three or four percent… [now] it’s always a double-digit increase,” he said.
According to data from AutoTrader.ca, the average price of a used Honda Civic, a popular option for used car buyers, rose 41.7 percent between February 2020 and February 2022.
The median price of a used car in BC is now over $40,000, up 32 percent from a year ago, the company said.
Baris Akyurek, director of marketing intelligence at AutoTrader.ca, says analysis of buyer habits has led to a few theories.
One possible reason is health and safety, he says: people no longer want to use public transport or ridesharing and are instead buying their own vehicle.
“Now that things are opening up … we think some of that pent-up demand has started to be realized,” he said.
Another factor is the low supply of new cars. According to Akyurek, ongoing problems in the manufacture of microchips that control functions in vehicles are leading to fewer cars being made worldwide.
As soon as the production of new vehicles returns to normal, he expects prices to stabilize again.
As of early 2020, the average bouquet cost $35 to $40, says Michelle Hodgson, owner of Vancouver-based Blossom and Vine Co. Now expect to pay upwards of $50 for the same bouquet.
The prices for roses and carnations, which are often imported from South America, have risen by around 40 percent in the last two years, she says.
Locally produced flowers – chrysanthemums, snapdragons, tulips, peonies – have meanwhile also become more expensive as demand from local businesses has also increased.
Hodgson adds that many growers around the world have had to shut down or scale back production during the pandemic.
“So we’re still seeing the impact of decisions made early in the pandemic affecting our care today,” she said.
According to Bridgitte Anderson, CEO and President of the Greater Vancouver Board of Trade, many companies that are members of the organization struggle with these costs, as well as work-related challenges such as employee retention.
She says rising costs and inflation aren’t giving businesses many options, forcing them to raise prices to keep operating.
“We really see it across the board, whether we’re talking small business or medium-sized business,” Anderson said.
Non-profit organization Habitat for Humanity is currently building 19 homes in Mission, BC — and building costs have increased significantly, according to Steph Baker, interim CEO and vice president of construction.
According to Baker, lumber costs exceeded their original budget by 35 percent, about $114,000 in additional costs.
“It’s affecting our ability to build affordable homes,” she said.
The nonprofit organization also operates ReStores – stores that sell new and used items, including home accessories and building supplies.
But donated wood products like lumber and furniture are hard to come by, Baker says.
“It’s gone the same day it hits the ground.”
John Innes, a forestry professor at UBC, says the price of timber has fluctuated “a lot” in recent years for a variety of reasons, including pandemic restrictions that halted production for many BC companies in 2020.
That year was also believed to be a decline in US housing, he adds, prompting companies to produce less wood.
In BC, postponement of logging for old stands has reduced the acreage that companies are allowed to log, while invasive bark beetles – which feed on trees – and wildfires have made it difficult to source good-quality timber.
“The amount of available lumber is becoming scarcer and so prices are going up,” said Innes.
Will this continue?
Andrey Pavlov, a finance professor at Simon Fraser University, believes companies will eventually start producing more items, which will level out prices.
But he also says governments should make it easier to produce goods in Canada so the economy isn’t vulnerable to global forces.
“Especially for smaller economies like Canada, it is very important to be competitive and create business conditions where local firms can produce more,” Pavlov said.