Rising gas prices and inflation are forming a tag team that is beating up on Saskatchewan residents’ wallets.
The average gas price in Regina is $1.73, with inflation hitting over five per cent in January.
Dr. Jason Childs, an associate professor with the Department of Economics at the University of Regina, said that it’s important to remember that Saskatchewan and Russia produce and export many of the same products.
“We are talking oil, agriculture commodities, specifically wheat and potash; those are the big areas of overlap. With Russia basically putting itself in a situation where it’s cutting itself off from the global market, demand is going to be there. People are going to be turning to use and other prices to fill that void. That’s going to mean higher prices and more opportunities.”
He said the residents in Saskatchewan would be fairing better than those in Eastern Canada.
“Getting a higher price for the products you produce is always beneficial. We are going to have an easier with this than Ontario, Quebec, or Atlantic Canada because we are going to counter push our economy, in that we are going to be able to receive higher prices for our products and be able to sell more products at that higher price.”
Childs said the residents could expect inflation to be around long-term.
“We are going to be seeing inflation probably for the rest of 2022, probably into 2023,” he stated. “The conditions that we are looking at that are driving it, the monetary policy movement of the central banks, the low-interest rates, the printing of money, combine that with recovering demand for commodities and now this global reduction in supply commodities, we’ve moved to a monetary cause to a supply reduction cause.”
Childs said though it will cost more, it could result in employees getting a raise.
“Yes, we are going to be paying higher prices, the dollars of income that we receive are going to go a short distance to meet our needs and wants, but we should some improvement in the labour market. We should see some improvement in income as well,” he said. “If commodity prices remain high and employment starts to rise, workers are going to be in a better bargaining position, and they are going to be able to hopefully make back most or perhaps all of the inflationary losses through wage gain.”
Childs said it would be necessary for residents to try and save money with the current cost of living.
“We all have to look at our own spending, and where we are spending and what we are getting for our spending,” he said. “You need to be thinking about what’s really going to be important to you and what’s really going to allow you to do what you want to do and the things you want to enjoy. Then you let fo some of that other stuff.”
“We are going to have to spend more time and energy thinking about budgeting and thinking about purchases,” he added.
