Bill’s Blog | May 4th, 2026
If you are finding it more difficult to pay your bills, you are not alone. Today, I want to cover this important topic, which is profoundly impacting you, me and all families in Canada, and what you can do to combat it. The sobering recent stat is that about 30% of Canadians (12 million) are about $200 away from a serious financial crisis and defaulting!
Questions and concerns around inflation:
Probably one of the most important questions: why do we have inflation, and who creates it? Inflation is a stated policy of every Central Bank on the planet (including the Bank of Canada), and usually their target is 2%. On the surface, it seems so insignificant. There are several serious problems with this goal. One, each year your purchasing power declines by 2%, and over 20 years our Canadian dollar is 40% worthless! Remember 20 years ago. On your Costco run, you could fill your cart for about $300, and now the same groceries are between $700 to $800 or more!
Second, inflation is not controlled by Central banks. There are several factors, and I will get to that shortly. And inflation is often significantly higher than the proposed 2% target, as we are currently experiencing. For example, our food prices have risen by over 25% in Canada since 2020. However, many staples like eggs are up over 40% since 2019. There are many examples of food staples being over 40%. How about eating out, and prices have doubled in the last few years? How about fuel costs at the pump? On January 1, 2026, the national average for gas was $1.35L, and today it is $1.84.8L. That is over a 35% rise in the cost of driving your vehicle! How about housing in Chilliwack? In 2015, the median price for a single-detached home was $388,259, townhouses were 343K, and condos were around 200K. Today, a single-detached home is about $912,500, townhouses are $592,500, and condos are in the $390,000 range. You’re getting the picture of how destructive inflation is! Things become unaffordable.
Third, Canadian wage growth has not kept up with real inflation, especially when compared to housing inflation. Whether ownership or renting. About 10 years ago, 70% of Canadian’s could afford to purchase a home based on median household incomes (detached, townhouse or condo), and today it is only about 25%! Most of our kids and grandkids will never own a home, unless parents or grandparents give them a large down payment or they receive an inheritance. Or, the housing market completely crashes! Sadly, the government has created this crisis with extremely poor policies. Mass immigration, illegals crossing the border, and too many foreign students without ensuring there is affordable housing. BC allowed hundreds of billions of foreign dollars to flood into our housing market, making housing unaffordable for the average BC working person. Investigations have been done, validating that there was significant illegal money and fraud in our province, and politicians and courts turned a blind eye.
Fourth, many Canadians often do not understand how our financial system works. Our Central Bank creates fiat currency (Canadian dollars) backed by nothing and lends it to our governments at interest. Canadian’s pay the interest through taxes and dozens of fees, but the debt never diminishes.
Fifth, Canada is a major gold producer, yet our Central Bank does not have even 1 oz of gold in its vaults. We have nothing of value to defend our currency, while many Central Banks worldwide have been purchasing record tonnage of gold for the last few years. Our Federal and Provincial governments are running unsustainable deficits, and the cost of borrowing continues to rise year after year. Governments love inflation. Inflation makes their borrowing costs less expensive to repay in devalued currency. Remember, governments never pay off the debts; they simply keep refinancing, extending, and pretending!
Sixth, so who causes inflation? As mentioned, there are many factors. But the primary sources are governments that endlessly borrow and the Central Banks that print billions and trillions of fiat currencies. As much as we are told that our Central Bank serves and protects Canadians, the truth is that they are primarily there to serve the Canadian government’s spending programs and agendas. Supply shocks can also create significant inflation, as we experienced during the COVID era. Wars are also very inflationary, as we are currently experiencing with fuel costs. Fuel costs are hitting many countries extremely hard, and about 50 nations now have fuel rationing. When fuel costs rise dramatically, transportation, travel, farming (food) and manufacturing costs rise, and increases are passed on to consumers. All goods and services are eventually impacted by rising prices. There is a risk of interest rates rising. The war with Iran is only temporarily paused, and I foresee the next pause to start shortly! If this war is prolonged, I expect an even greater inflation shock in the coming months and possibly longer.
So, I hope my blog helped you to better understand inflation and its destructive power, making life harder and harder for average Canadians. Truthfully, we as individuals have no control over inflation. Except to vote out corrupt or incompetent politicians. But we can all make adjustments to our spending habits and priorities. Let me share with you a few strategies for you to consider.
- Investment Strategies to Hedge against Inflation. Historically, high-quality stocks have beaten inflation over the long term. Consider dividend-paying stocks with a long history of increasing dividends to generate reliable income to offset the rising cost of living.
- Real Assets and REITs: Invest in Real Estate Investment Trusts (REITs) or commodities (Gold, silver, oil, uranium, agricultural products) which tend to rise in value alongside inflation.
- Ensure you diversify into multiple asset classes to lower your risks and reduce volatility.
- Banking and Cash Management: Use high-interest savings vehicles over traditional bank/credit union savings accounts.
- Avoid having too much cash: While liquidity is important, excess cash loses purchasing power daily.
- Build a 3 to 6-month Emergency Fund. Avoid using high-interest debt for unexpected costs.
- Budgeting and Spending Habits: Re-assess your budget. Track your expenses and categorize them between essential expenses (housing, food, utilities and discretionary spending (entertainment, eating out, coffee, etc).
- Use discount stores and apps to find deals.
- Cook at home the majority of the time. Make your own coffee/tea in the morning and take it with you.
- Debt Management: Prioritize paying off high-interest debt first.
- Fix your mortgage rate. If you have a variable-rate mortgage, consider locking in your rate to stabilize your monthly payments. I also shared last month in my Blog the Manulife OneBank solution to accelerate paying off your mortgage.
- Avoid new debt.
- Career and Lifestyle: Negotiate your salary. If you are a business owner, consider giving yourself a raise if your business allows it.
- Automate Savings. Automate transfers to savings and investment accounts to ensure consistency.
- Focus on what you have control of. If you are a couple, work to be on the same page with your discussed strategies. Financial freedom takes consistent work, strategy, monthly reviews and adjusting when needed.
In summary, we are all living in increasingly challenging times, and it is best to get help when you need it and develop a sound plan.
All the best,
Bill Westmacott: Owner, Fivefold Financial. Wealth Solutions and Life Insurance Strategies for those in BC.
One Response
Very informative.