B.C.’s gas prices, food costs, housing impacted by Ukraine crisis

Experts are weighing in on the heavy impact the attacks on Ukraine have had on Canada’s already high cost of living.

With skyrocketing crude oil prices, and wheat shortages, many are predicting the price of goods and services will only be increasing in the days and weeks ahead.

Soaring gas prices

Russia’s invasion of Ukraine has been putting even greater pressure on already surging oil prices. The price of gas is up another five cents to as much as $1.869 in parts of Metro Vancouver Wednesday morning.

Some people in Abbotsford and Mission took to social media to point out prices were record-breaking high even outside of the Lower Mainland, where drivers pay additional taxes at the pump.

Read more: Trudeau outlines more measures to punish Putin for ‘grave miscalculation’ over Ukraine

Roger McKnight, chief petroleum analyst at En-Pro International says the high demand for oil combined with a shortage of supply has been pushing oil prices, and consequently gas prices, up for weeks.

Canada has also moved to ban all imports of crude oil from Russia, according to Prime Minster Justin Trudeau who announced more sanctions would be coming against Russia to cut off its funds to fuel the military aggression.

A photo of the gas prices in Vancouver near 1 and Renfrew on March 2, 2022. (Courtesy: Dean Recksiedler)

#Breaking WTI and Brent crude oil prices climb further as OPEC maintains previous plan to raise daily output by 400,000 bpd. Cartel delegates tell Bloomberg…"there wasn't even a discussion about Russian oil supplies".@CityNewsTOhttps://t.co/lPxT58ubQG

— Mike Eppel (@eppman) March 2, 2022

The U.S. and 30 allied countries have said they plan to release 60-million barrels of oil from their reserves amid the price surge to help stabilize the energy markets.

Food costs going up

Dalhousie University food policy expert Sylvain Charlebois says Canadians can expect to pay more at the grocery store due to the war in Ukraine, gas prices, and several other global factors.

“The Ukrainian crisis is just happening at the worst time for the agri-food sector. The sector itself has been dealing with supply chain challenges and of course with commodity prices going up, processing food is becoming quite costly. Just this morning commercial wheat has surpassed 10 dollars U.S. a bushel, which is a first for 14 years. Which tells you what’s happening with ingredients,” he said.

“Often when wheat goes up, everything goes up, like soybeans…barley, corn…the Ukraine is Europe’s breadbasket and 25 per cent of the corn produced around the world. Wheat – Ukraine is ninth in the world when it comes to export. To add fuel to the fire, that region is also a huge producer of fertilizers,” he added.

He says there is evidence to suggest Canada could surpass it’s forecast 7 per cent for 2022 due to the Ukrainian crisis.

Prospective homebuyers to face another hurdle

While there was some speculation that the situation in Ukraine would influence the Bank of Canada’s decision on interest rates, that was determined to not be the case.

The Bank of Canada has gone ahead with an expected interest rate hike Wednesday, as it tries to temper inflation and the overheated real estate market.

The central bank increased its key overnight rate by 25 basis points to 0.5 per cent, starting what is expected to be an trend upward from historic lows through the pandemic.

This impacts variable rate mortgages and home equity based lines of credit — the increasing cost of borrowing money will be a stretch for many Canadians carrying a lot of debt.

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It could also lead to a tougher time carrying mortgages for first-time home buyers. But on the other side of that, home prices in many markets may start to moderate.

However, it is widely thought B.C.’s hot housing market is largely drive by a lack of supply and prices may not soften on the West Coast.

The housing sector has also been heavily impacted by the supply chain crisis throughout the pandemic, with a shortage of many goods and skilled workers slowing the high-demand construction sector.

With files from The Canadian Press