What goes up doesn't necessarily come down.
That's contrary to the sentiment of a surprisingly large proportion of respondents to the Bank of Canada's quarterly consumer expectations survey, released last week.
According to the survey, more than a quarter of Canadians believe that current decades-high prices will drop five years from now.
"What goes up must come down," said one respondent in a post-survey interview.
The sentiment likely raised eyebrows at the central bank
The chance of deflation in five years is "extremely unlikely," Laval University economics professor Stephen Gordon said.
Though some prices will come down, as has been the case with gasoline prices, Gordon said higher prices for goods feed into each other through the supply chain and become baked into the economy.
"It starts getting embedded into people's expectations and it becomes a self-fulfilling prophecy," he said.
Meanwhile, the Bank of Canada said confusion between deflation (falling prices) and disinflation (slowing price growth) wasn't the reason the figure was so high, noting that its survey respondents understood the difference.
The central bank regularly monitors inflation expectations in the economy to make sure it has control over price growth. With inflation running well above its two per cent target, inflation expectations have been a top concern for the Bank of Canada.
If people and firms expect inflation to remain high in the future, that expectation can lead to businesses setting prices higher and workers asking for higher wages.
Normally, people expect deflation when the economy isn't doing well. However, the Bank of Canada pointed out that respondents who said they are anticipating deflation were less likely than other Canadians to expect a recession in the next twelve months.
Instead, these respondents were more likely to believe that inflation was caused by supply chain disruptions. Once these temporary pressures on inflation fade, many of them believe prices that rose rapidly would then decline.
Although TD director of economics James Orlando agrees that deflation is unlikely on the horizon, he said there is logic behind what these respondents are thinking.
"As supply chains ease, and they're easing very quickly right now, we're going to start getting more and more discounting," Orlando said.
Consumer price index data shows prices for some goods have already been falling in recent months.
The prices of durable goods for example, which includes products like furniture, fell between November and December.
However, that doesn't mean the economy will experience broad-based deflation, Orlando said.
"The reason why we don't think total inflation is going to be sustained in a negative territory ... is because you got to consider that the economy isn't just goods, but it's also services," he said.
Prices for services are driven by wages, he said, which are unlikely to fall given they're sticky nature.
Though deflation may sound like good news on face value, Gordon said it isn't something anyone should be wishing for.
"Business would have to be in really bad condition for firms to be cutting their prices. And if they're in that situation, they're probably cutting workers," he said.
Similarly to high inflation, deflation would also set alarm bells off at the central bank. Orlando said Canada's economic system expects there to be some inflation and has that built into expectations.
If prices were to begin falling, that would force the Bank of Canada to jump in and to stabilize prices.
For now, the central bank's worries are far-removed from fears of deflation.
Canada's annual inflation rate was 6.3 per cent in December, a noticeable improvement from the month prior but still too high for the Bank of Canada's comfort.
Though some Canadians appear to believe prices will repair themselves, the Bank of Canada isn't counting on it as it gears up for one more -- and potentially final -- interest rate increase on Wednesday.
This report by The Canadian Press was first published Jan. 23, 2023.
Procurement Minister and newly appointed Quebec lieutenant Jean-Yves Duclos is warning the NDP that the dental care program it helped put into place will be in jeopardy if it pulls its support from the governing Liberals.
A Nova Scotian YouTuber has launched a mini-truck bookmobile.
At least two students at Gettysburg College in Pennsylvania have been suspended from the swim team after a report that a racial slur was scratched onto a student's body, officials said.
Infectious disease physician Dr. Isaac Bogoch says whooping cough is most risky for unvaccinated infants, children and older people.
In less than two months, Americans will go to the polls to choose their next president. But the process that translates those millions of votes into one seat in the Oval Office is much more complicated than a straight tally.
Specialist divers surveying the wreckage of the US$40 million superyacht that sank off Sicily in August, killing seven people including British tech tycoon Mike Lynch, have asked for heightened security to guard the vessel, over concerns that sensitive data locked in its safes may interest foreign governments, multiple sources told CNN.
Donald Trump has long pledged to deport millions of people, but he's bringing more specifics to his current bid for the White House: invoking wartime powers, relying on like-minded governors and using the military.
Kate, the Princess of Wales, made her first public appearance Sunday since she announced she had completed chemotherapy and would return to some public duties.
A new study is adding to emerging research showing that exposure to metals such as cadmium, uranium and copper may also be associated with the leading cause of death worldwide, cardiovascular disease.
The British Columbia election campaign is set to officially start today, with Lt.-Gov. Janet Austin issuing the writ for the Oct. 19 vote.
A man is facing numerous drug trafficking charges after Dufferin OPP seized a large assortment of drugs and weapons in Orangeville earlier this week.
Pasquale Monaco says he’s debating whether to keep renting out the two-bedroom basement apartment of the Montreal building he owns after it was flooded — again — in August, when the remnants of tropical storm Debby sent four feet of water rushing into the space.
Infectious disease physician Dr. Isaac Bogoch says whooping cough is most risky for unvaccinated infants, children and older people.
The London Police Service (LPS) is currently investigating a suspicious death in the east end.
One person has died following a shooting in Scarborough late last night.
Donald Trump has long pledged to deport millions of people, but he's bringing more specifics to his current bid for the White House: invoking wartime powers, relying on like-minded governors and using the military.
An explosion in a coal mine in eastern Iran killed at least 33 workers and injured 17 others, officials said Sunday, marking one of the worst mining disasters in the country's history as others remained missing hours after the blast.
More than a year after the Titan submersible imploded, killing all five voyagers on board, the story of the ill-fated expedition to the Titanic has taken the form of a modern-day Greek tragedy overflowing with mortal pride and heedlessness.
In less than two months, Americans will go to the polls to choose their next president. But the process that translates those millions of votes into one seat in the Oval Office is much more complicated than a straight tally.
At least two students at Gettysburg College in Pennsylvania have been suspended from the swim team after a report that a racial slur was scratched onto a student's body, officials said.
A two-storey building collapsed in the southern Italian province of Naples early Sunday, killing two young siblings and their grandmother, while burying the children's mother under the rubble, firefighters and local media said.
Prime Minister Justin Trudeau is set to be in New York this week for the 78th meeting of the United Nations General Assembly and the Summit of the Future amid increasing geopolitical instability around the world.
A $2.14-billion federal loan for an Ottawa-based satellite operator has Canadian politicians arguing about whether American billionaire Elon Musk poses a national security risk.
Procurement Minister and newly appointed Quebec lieutenant Jean-Yves Duclos is warning the NDP that the dental care program it helped put into place will be in jeopardy if it pulls its support from the governing Liberals.
Body mass index, a long-time tool used to measure a person's health, may soon be out the door as some health professionals push for a system they say is more accurate.
Infectious disease physician Dr. Isaac Bogoch says whooping cough is most risky for unvaccinated infants, children and older people.
A morning cup of coffee may do more than just perk you up, according to new research.
If something looks too good to be true, it might be. That's the message from Saskatchewan horticulturists after customers have come into their stores hoping to buy purple apple trees this month.
The owner of the shuttered Three Mile Island nuclear power plant said Friday that it plans to restart the reactor under a 20-year agreement that calls for tech giant Microsoft to buy the power to supply its data centers with carbon-free energy.
Lebanese authorities on Thursday banned walkie-talkies and pagers from being taken on flights from Beirut airport, the National News Agency reported, after thousands of such devices exploded during a deadly attack on Hezbollah this week.
A Nova Scotian YouTuber has launched a mini-truck bookmobile.
Kathryn Crosby, who appeared in such movies as 'The 7th Voyage of Sinbad', 'Anatomy of a Murder,' and 'Operation Mad Ball' before marrying famed singer and Oscar-winning actor Bing Crosby, has died. She was 90.fff
'Saturday Night Live' will have a slew of famous faces to help kick off its historic 50th season when the show returns later this month.
It’s not easy going up against Canada’s banking oligopoly, but some are trying.
It is not a great time to be a coffee drinker. In general, coffee bean prices are the highest they've been in more than a decade.
The maker of the popular party game Cards Against Humanity is accusing Elon Musk's SpaceX of trespassing on and damaging a plot of vacant land the company owns in Texas.
Nick Kolomyja reckons axe throwing may have saved his life.
More than 2,200 zoo professionals from 23 different countries have gathered in Calgary for the annual Association of Zoos and Aquariums conference.
Tattoos are becoming more common in today's society and, as a result, appear to be more acceptable in the workplace than they used to be.
The Winnipeg Blue Bombers have a nickname for the opposition’s end zone. They refer to it as the “chicken box.â€
Jonathan Aranda homered for the second consecutive game, helping Taj Bradley and the Tampa Bay Rays beat the Toronto Blue Jays 3-2 on Saturday.
Kiefer Sherwood spent several nights last spring chasing Quinn Hughes around the ice and generally pestering the Vancouver Canucks.
General Motors (GM) has issued a recall for 38,000 vehicles for safety risks related to a software glitch, Transport Canada reported in a notice on Wednesday.
Chechen leader Ramzan Kadyrov has accused Tesla CEO Elon Musk of 'remotely disabling' his Cybertruck, which had been sent to the frontline of Russia's war in Ukraine.
An Ontario man says it is 'unfair' to pay a $1,500 insurance surcharge because his four-year-old SUV is at a higher risk of being stolen.
Cole Haas is more than just an avid fan of the F.W. Johnson Wildcats football team. He's a fixture on the sidelines, a source of encouragement, and a beloved member of the team.
Getting a photograph of a rainbow? Common. Getting a photo of a lightning strike? Rare. Getting a photo of both at the same time? Extremely rare, but it happened to a Manitoba photographer this week.
An anonymous business owner paid off the mortgage for a New Brunswick not-for-profit.
They say a dog is a man’s best friend. In the case of Darren Cropper, from Bonfield, Ont., his three-year-old Siberian husky and golden retriever mix named Bear literally saved his life.
A growing group of brides and wedding photographers from across the province say they have been taken for tens of thousands of dollars by a Barrie, Ont. wedding photographer.
Paleontologists from the Royal B.C. Museum have uncovered "a trove of extraordinary fossils" high in the mountains of northern B.C., the museum announced Thursday.
The search for a missing ancient 28-year-old chocolate donkey ended with a tragic discovery Wednesday.
The Royal Canadian Mounted Police is celebrating an important milestone in the organization's history: 50 years since the first women joined the force.
It's been a whirlwind of joyful events for a northern Ontario couple who just welcomed a baby into their family and won the $70 million Lotto Max jackpot last month.
A six-year-old girl who was reported missing in northern B.C. earlier this week remains unaccounted for, and "significant resources from across the province" have joined in the search, police said Saturday.
Volunteers and staff members gathered along Vancouver’s Stanley Park Seawall Saturday to pick up litter as part of International Coastal Cleanup Day.
A heritage home in Vancouver suffered "extensive damage" in a fire that broke out late Saturday morning, according to firefighters.
One person has died following a shooting in Scarborough late last night.
Toronto police have arrested three people and they are looking for two others in connection with an alleged fraud that saw a man and his daughter bilked out of more than $18,000.
A man who was critically injured in an eight-vehicle pileup in Milton Friday has died of his injuries in hospital.
Calgary mayor Jyoti Gondek is holding a 10 a.m. Sunday update where she is expected to announce the end of water restrictions.
Nick Kolomyja reckons axe throwing may have saved his life.
Calgary fire crews were busy early Sunday dealing with a fire, a missing cat and a vehicle that drove into the side of a garage.
Police are looking to speak with a female who was a passenger in a stolen vehicle that was recovered early Saturday morning in Kanata.
A body has been found in the vicinity where a woman went missing on the Ottawa River near Pembroke, Ont. while kayaking Tuesday night, according to the Ontario Provincial Police (OPP).
It's been one year since Michael Andlauer took over ownership of the Ottawa Senators and on Saturday, he spoke for the first time about the tentative deal for a new arena at LeBreton Flats.
Last month’s massive water main break in Montreal’s Ville Marie borough has left the company Cirque Eloize reeling, with nearly 10,000 items from their storage facility destroyed.
Pasquale Monaco says he’s debating whether to keep renting out the two-bedroom basement apartment of the Montreal building he owns after it was flooded — again — in August, when the remnants of tropical storm Debby sent four feet of water rushing into the space.
A 19-year-old man is in critical condition after being stabbed in Montreal on Saturday.
The Winnipeg Blue Bombers have a nickname for the opposition’s end zone. They refer to it as the “chicken box.â€
Nick Kolomyja reckons axe throwing may have saved his life.
The number of Edmontonians experiencing homelessness has risen 47 per cent this year, according to data from the city's main housing agency.
The Celtic Colours International Festival will return to Cape Breton, N.S., for nine days from Oct. 11 to 19, with hundreds of events and performances scheduled to take place in communities around the island.
A Nova Scotian YouTuber has launched a mini-truck bookmobile.
A 76-year-old man who was reported missing Saturday in Annapolis District, N.S., has been found deceased.
The search for a missing six-year-old boy in Shamattawa is continuing Friday as RCMP hope recent tips can help lead to a happy conclusion.
While slang may come and go, experts say the phenomenon behind them, which constantly churns out brand-new bon mots, is as old as language itself.
People living in Winnipeg’s Centennial neighbourhood have a new park to call their own. On Saturday, the community celebrated the grand opening of Giizhigooweyaabikwe Park on Lizzie Street.
Fire officials are investigating after a fire completely destroyed the community fridge in the Cathedral neighborhood.
The last two months after losing her daughter Bella have been extremely difficult for Kyla Thomson.
Regina police arrested three youths in connection to a bear mace incident at a Regina high school on Friday.
Brantford, Ont. residents were met with an unexpected sight on Saturday evening as a suspected funnel cloud appeared in the skies above the city.
Police were called to a business in the area of University Avenue East and Weber Street North at around 10:40 p.m. Saturday for a report of a man attempting to stab another man.
Police said the pedestrian, a 52-year-old man, was taken to an out-of-region hospital with life-threatening injuries and the driver of the vehicle failed to remain at the scene.
The 75-year-old building, formerly the Waskesiu Chamber of Commerce building, was relocated to the Parks Canada compound on the edge of the townsite.
Saskatchewan RCMP major crimes unit is investigating after a man’s body was found on Sweetgrass First Nation.
Motors were roaring, and tires were spinning as Saskatoon's biggest names in motocross gathered together for the 50-year anniversary of the club's founding on Saturday.
Ontario’s police watchdog is investigating after an Ontario Provincial Police officer discharged his firearm at a 36-year-old man in near Moonbeam, Ont., on Friday night.
Procurement Minister and newly appointed Quebec lieutenant Jean-Yves Duclos is warning the NDP that the dental care program it helped put into place will be in jeopardy if it pulls its support from the governing Liberals.
For some young people, a popular method for getting a quick high is by misusing laughing gas — and lately, that’s in the form of nitrous oxide from products sold by the company Galaxy Gas.
The most popular hockey podcasters on the planet brought some major attention to the Forest City this weekend with the annual Chiclets Cup.
The identity of a motorcyclist has been revealed by loved ones on social media following Friday’s fatal south end collision in London. The London Police Service has not released anything regarding the driver’s identity.
Huron County OPP are investigating a serious single vehicle collision that took place west of Seaforth.
The Barrie Skateboard Association (BSA) hosted a unique competition at the City's Skate Park on Saturday to celebrate its 25th anniversary, which showcased the park's importance and the growth of skateboarding in the region.
Police located and arrested a male suspect Saturday evening in relation to an alleged assault incident that occurred earlier this week in Gooderham.
A man is facing numerous drug trafficking charges after Dufferin OPP seized a large assortment of drugs and weapons in Orangeville earlier this week.
Windsor firefighters had an early start to the day as a fire broke out in the 1500 block of Pellissier Street in the city.
The Amherstburg Uncommon Festival is living up to its name with the addition of a drone light show — a first for Essex County.
The Chatham-Kent Police Service (CKPS) has arrested a man following an incident on Saturday.
A man who was found dead behind a curling rink in Nanaimo, B.C., earlier this month was the victim of a homicide, police confirmed.
A sea lion swam free after a rescue team disentangled it near Vancouver Island earlier this week.
A six-year-old girl who was reported missing in northern B.C. earlier this week remains unaccounted for, and "significant resources from across the province" have joined in the search, police said Saturday.
A pair of runaway pigs are in the custody of an animal sanctuary in the Okanagan after evading police and volunteers for hours earlier this week.
The Red Bridge, a historic landmark in Kamloops, B.C., was completely destroyed by fire early Thursday morning.
Animal protection officers in British Columbia have rescued three pit bulls – including one that gave birth to 10 puppies – from a rat-infested home in Kelowna.
Despite the heavy rain, plenty of muscle turned up for United Way’s annual Pull the Bus fundraiser in Lethbridge Friday.
Lethbridge County has rescinded its fire restriction as a result of the recent cool, wet weathr.
The Lethbridge Hurricanes kicked off the 2024-25 season on a winning note Friday night, defeating the Edmonton Oil Kings 3-1 in a game played at VisitLethbridge.com Arena.
A northern Ontario man is facing a $12,000 fine after illegally shooting a moose near the Batchawan River.
Following an outbreak of COVID-19 on its continuing care floor and just ahead of the flu season, St. Joseph’s General Hospital in Elliot Lake has opted to re-introduce a universal masking policy until further notice.
A 26-year-old driver from Surrey, B.C., has been charged with three counts of criminal negligence causing death and bodily harm in a crash that killed two youths in northern Ontario last year.
Newfoundland and Labrador sponsored a minor football team in England, now they’re about to play one of the biggest clubs in European soccer.
Newfoundland and Labrador's chief medical officer is monitoring the rise of whooping cough infections across the province as cases of the highly contagious disease continue to grow across Canada.
A 16-year-old biennial event aimed at fostering business in the country's eastern Arctic and northern regions has been cancelled indefinitely as a dispute unfolds between Inuit in Canada and a Labrador group claiming to share their heritage.
The Shopping Trends team is independent of the journalists at Â鶹´«Ã½. We may earn a commission when you use our links to shop. Read about us.
