Inflation - Part I

The Cost of Living in Toronto...

I’ve always loved the stories a good plot could tell, so I decided to learn more about data visualization and R. R is a funny name for a handy language that’s designed to deal with data. (Aside: R evolved from S which came from Bell Labs in the 70s which is further evidence that everything was invented in Bell Labs in the 70s.)

For a first try, I thought I’d plot a simple time-series of inflation-adjusted prices of things in my city. Here’s what I learned:

Wages

No surprise that median family income is flat as a pancake. The minimum wage did keep pace with inflation, though that says nothing about its absolute level.

Homes

It’s easy to forget today, but home prices do indeed go down—a lot and for long periods. I thought home prices would crush everything else. The fact that they didn’t is a function of how much averages can hide. These numbers reflect all home types across all areas of the city. More on this later.

TTC

The Toronto Transit Commission (TTC) operates public transportation in the city. After their massive increase of the adult cash fare in the early 90s it’s been a slow and steady rise.

Toronto Star

From 1990 to about 2005 the Star just kept pace with inflation. After that, price increases were greater than they had been in the past.

Air Travel

This isn’t shown on this plot, but I thought it was interesting. A big part of what to study comes from what data is available. Statistics Canada tracks base air fares from Toronto, so I thought that would be good to look at as well. According to Statistics Canada, the average base fare out of Toronto, adjusted for inflation costs 40% less in 2015 than in 1990. What?! That has certainly not been my experience. Or yours. It has to do with what is meant by a “base”" fare. You’d think a table called, “Average domestic fares for Canada and ten major cities” would be about the price to fly. But you’d be wrong. It’s the price to fly, not including taxes and fees. That’s like measuring inflation, not including inflation. I thought the high cost of air travel in Canada was caused by a lack of competition. Clearly, that’s not the whole story. Here’s what gets tacked on to the base fare:

Fee Explanation
Federal and provincial fuel taxes British Columbia eliminated its international fuel tax in 2012, joining New Brunswick, Alberta, Quebec and Saskatchewan
Airport Rent Airports pay rent to the federal government for the use of Crown land
Air Travellers Security Charge Cost of screening passengers and baggage
NAV Canada NAV Canada recovers the costs from airlines of providing air navigation services
Airport Improvement Fees Primarily funds airport infrastructure projects
Federal and provincial fuel taxes British Columbia eliminated its international fuel tax in 2012, joining New Brunswick, Alberta, Quebec and Saskatchewan
Payments in Lieu of Taxes Cities hosting federal properties can apply for payments in lieu of taxes
Harmonized Sales Tax (HST) Tax is applied to some of the taxes above.