Forecasts crumble the moment Canadians respond to rising costs or policy shifts

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Most forecasts fail for one simple reason: they assume people won’t change their behaviour when circumstances change. That mistake keeps producing dramatic but misleading predictions.

One example appeared recently in a news story warning that food costs for the average family will rise by $1,000 in the coming year. Prices for many items are expected to climb, especially meat and notably beef. Estimates like this often come from Canada’s Food Price Report, which looks at how much the average household’s grocery bill may change in the year ahead.

How the $1,000 figure was reached is straightforward. Statisticians priced a typical family’s grocery cart and added the expected increases. Buying the same mix of groceries next year would cost $1,000 more. The problem isn’t the math. It’s the assumption that families won’t change what they buy. In reality, shoppers adjust, and the real increase is almost always lower.

Statistics Canada data backs this up. When beef prices rose sharply in 2022, many households cut back or shifted to cheaper meats. Households don’t simply absorb higher costs; they rebalance their budgets in real time. They buy less meat, choose lower-cost options or keep the pricier items........

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