What will cost you more in 2014

As with any new year, 2014 promises to bring fresh starts, earnest resolutions -- and, in some cases, higher prices.

When it comes to what consumers can expect on how their wallet will be affected, there’s good news and bad news.

“Broadly speaking, inflation in Canada is pretty muted, and it will remain fairly muted next year,” says Michael Burt, director of industrial economic trends at the Conference Board of Canada. “As well, inflation for services will generally outpace goods. This has been a consistent trend over time and is linked to the fact that the degree of import competition in services is generally less.

The effects of the recent weakness in the dollar will be something to watch as well.

“Prices for consumer goods that are very import-reliant and/or generally priced in U.S. dollars on international markets are likely to see stronger inflation,” Burt notes.

Look for the Consumer Price Index to post an increase of about 1.8 per cent from December 2013 to December 2014, up from the 1.4 per cent hike it took during the same period the year before.

There are a few products that are expected to see above-average consumer inflation.

Cars

This can be partially tied to the weaker Canadian dollar, but incentives are also a factor.

“The use of incentives in general has fallen since the end of the recession, but auto sales in Canada will likely set a record in 2013,” Burt says. “Strong sales mean less need to use incentives and more pricing power for car dealerships.”

Alcoholic beverages

Here’s a category that’s historically seen steady gains in prices, a trend that’s expected to continue.

“Essentially people have a relatively low degree of sensitivity to price increases for these products,” Burt explains.

Energy

“In particular, natural gas prices are expected to rise, and electricity to a lesser extent,” Burt says. “Natural gas prices have been unusually low in the past year, leading to declines in production and stronger demand growth. As a result, we expect an increase in natural gas prices and thus home heating costs for much of Canada.”

Certain foods

Food costs overall will increase marginally in 2014, by between 0.3 and 2.6 per cent, according to the University of Guelph Food Price Index. Prices for staples such as cheese, eggs, milk and frozen vegetables may even decrease, mostly due to increased competition.

The prices of fish and seafood are expected to rise more quickly, from between 3 and 5 per cent. Those increases are the result of increased pressure on fisheries for catch, as well as more pressure from consumers and retailers alike for a sustainable catch, the index noted. The report also stated that restaurant food prices are expected to increase by no more than 2 per cent.

The index predicts the following price jumps:

• Meat: up 0.6 to 2.1 per cent
• Grains: up 0.2 to 2 per cent
• Fruit and nuts: up 0.6 to 1.2 per cent
• Vegetables: up 1.4 to 2.1 per cent

Passports

The cost of a five-year passport will increase to $120 from $87.

As well, as of March 31, 2014, new fees will be charged for specific “value-added” services, services that were free in the past. For instance, it will cost $45 to replace a lost or stolen passport. Approximately 55,000 Canadian passports are reported lost or stolen annually.

Plus, anyone ordering or wanting to receive their passport outside of Canada will see fees nearly double.

Falling prices, by contrast, are expected in furniture, clothing, and electronics.

“Prices in these categories have been trending down for years due to the strong Canadian dollar, the shifting of production to low-cost countries, and quality improvements in the case of electronics,” Burt says. “The weaker dollar will slow the rate of deflation for these products, but we don’t expect to see sudden, large increases in prices.