This Country Is in a Slow-Motion Economic Collapse
Cauliflower is a bland staple on the dinner tables of most American households. But in Canada, the country’s slow-motion economic collapse has made this vegetable an extravagance.
North of the border, a head of cauliflower costs more than CA$8.00 in grocery stores across the country, fallout from the tumbling Canadian dollar and crippled resource economy. At today’s prices, two heads of cauliflower now cost more than a barrel of Western Canadian Select crude oil. (Source: “Canadians Are Going Loonie on Social Media About Skyrocketing Grocery Bills,” Bloomberg, January 13, 2016.)
And expensive cauliflower is just the beginning.
Last week, Bloomberg reported grocery stores are charging CA$3.00 for a cucumber, CA$8.19 for a dozen eggs, and CA$10.00 for a pound of grapes. In some locations, a box of “Frosted Flakes” is now over CA$15.00. (Source: Ibid.)
Iceberg lettuce goes for up to CA$3.00, up from an average of CA$0.90 in the past, according to The New York Times. One head of broccoli sells for CA$4.00, compared to $1.50 for a pair last year. (Source: “In Canada, the 8-Dollar Cauliflower Shows the Pain of Falling Oil Prices,” The New York Times, January 20, 2016.)
Soaring prices are just one sign of Canada’s slow-motion economic collapse. For years, the country rode the global commodity boom. China’s rapid growth created an insatiable demand for raw materials, leading to a windfall for Canada’s resource-based economy.
But today, the picture has reversed. Low commodity prices have crippled the nation’s labor market, sending the value of the Canadian dollar plummeting. This has increased the prices households pay for everything from vegetables and electronics to vacations priced in U.S. dollars.
However, the situation may get even worse in the weeks ahead. In a desperate bid to stimulate the country’s economy, the Bank of Canada is expected to cut interest rates at its next meeting this spring. If the central bank resorts to such a measure, it could result in another sell-off in the CAD to USD exchange rate and higher grocery prices for households.