Natural gas price hikes will fuel inflation and hit low-income Canadians the hardest
Global News
Natural gas prices are the highest they've been in six years and low-income families will be disproportionately affected this winter.
After almost two years of supply shortages and cost increases due to the COVID pandemic, here’s one more thing that’s going up in price this winter: natural gas.
Already, a number of Canadian natural gas distributors have hiked their rates.
FortisBC Energy Inc., British Columbia’s largest natural gas distributor, warned in September it would increase rates starting in October, with the majority of customers expected to pay around $8 more a month.
Ontario’s Enbridge Gas said the typical residential customer will see a bill increase of about $7 to $44 a year depending on where they live.
Manitoba Hydro has said the annual bill for a typical household will increase by approximately 8.7 per cent, with larger volume customers potentially seeing increases as high as 19 per cent.
But the impact of pricier natural gas goes well beyond bloated utility bills and will hit low-income Canadians the hardest, says Sohaib Shahid, director of Economic Innovation at the Conference Board of Canada.
On the one hand, higher heating bills will push up shelter costs, which already eat up almost a third of the total annual spending of Canadians in the bottom 20 per cent of the income distribution, Shahid says. By comparison, those in the top 20 per cent devote just a fifth of their annual spending to things like rent, mortgage and utilities.
On the other hand, the rising cost of natural gas and commodities also puts upward pressure on the prices of a variety of other products.