Research from the Bank of Canada and Statscan found consumers’ perception of inflation tends to put more weight on prices that go up rather than down.Chris Young/The Canadian Press

Claude Lavoie is a contributing columnist for The Globe and Mail. He was director-general of economic studies and policy analysis at the Department of Finance from 2008 to 2023.

A mid-December Abacus poll shows 62 per cent of Canadians identify high cost of living as their predominant concern. This worry isn’t unique to Canada; more than half of Americans, French and other Europeans cite cost of living as their main pressing issue. With such transatlantic consensus, country-specific causes can’t be the driving factors.

The pandemic first comes to mind, but cost-of-living complaints predate it. Polling shows 55 per cent to 60 per cent of Canadians were already highly concerned about rising costs in 2019 and 2015, when inflation was well below the Bank of Canada’s target.

But Statistics Canada data tell a different story. Households in every income group saw their after-tax income grow faster than prices over the past decade.

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