Oh so hard on the wallet

Terry Roberts
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It's the start of a new year, and for many of us, it's a time to reflect. Reflect on the year that's past, and how we faired in all aspects of our lives, including family, careers, health, friendships and, without doubt, financially.

Generally speaking, these are upbeat times in our province, and the future looks bright, with a recent think-tank forecasting that Newfoundland and Labrador will lead Atlantic Canada in economic growth in 2013, at a rate of 3.4 per cent. The gains will be fuelled by investments in mining and the oil sector, most notably efforts to retrieve the substantial amount of oil in the Hebron offshore field, located some 350 kilometres northeast of St. John's, not far from Hibernia.

The oil companies behind the project expect to spend some US$14 billion before it can begin producing oil in 2017. At peak, the project will employ an estimated 3,500 people during the construction phase, with fabrication facilities at Bull Arm and Marystown doing a large amount of the work. With employment levels starting to drop in Long Harbour, where a multi-billion-dollar nickel processing facility is under construction, the timing is near perfect.

For those who work in these sectors, the news is welcome. This province has led the way in terms of wage gains, and that's likely to continue. The housing market, though levelling off, remains robust when viewed from a historical perspective, and there are signs everywhere of a healthy, strong economy.

The latest unemployment rate stands at 11.5 per cent, down 1.2 per cent from a year ago, and well below historical numbers.

And though the debate is far from over, the massive Muskrat Falls hydroelectric project in Labrador is being viewed by many as another reason to look optimistically into our future.

But it's not all rosy. In many cases, the incomes we earn are not keeping pace with inflation, and this leaves us with less real money in our pockets. For many low and fixed income earners, theses increases are forcing people to make changes in order to pay for the daily essentials such as food, transportation and accommodations.

Food prices have risen substantially in recent years, and there's every indication that trend will continue. The price for fresh vegetables, for example, is enough to leave many with a gap-mouthed feeling of sticker shock. This makes it harder to eat healthy, which is only a recipe for bigger problems down the road.

The average family in this province spent just under $7,000 on food in 2010. Those are the latest figures available from Statistics Canada, but it's a sure bet that $7,000 will not buy the same amount of food in 2013.

And we have to deal with a pain threshold at the gas pumps that is bordering on torture, with the average price per litre last week at just under $1.30. Only drivers in Nova Scotia and the Northwest Territories were paying more, according to GasBuddy.com.

Remember those days in 2008 when we were paying about 80 cents/litre?

What's more, consumer price increases have been among the highest in the country in this province in recent months, leading the way among all provinces with a 2.2 per cent growth in October, according to Statistics Canada.

We can also expect to see restrained government spending, including job cuts, as the provincial government attempts to wrestle control of a ballooning operating deficit that is now expected to top $750,000,000 for the current fiscal year.

And let's not forget that homeowners in this province will also be digging deeper into their pockets to pay property taxes in 2013, with some increases averaging 20 per cent and more.

So as we bask in our unprecedented prosperity, it's also important to look broadly at the financial well-being of our province. We have many reasons to be confident and content, but just as many reasons to be concerned and careful.

— Terry Roberts

Organizations: Statistics Canada

Geographic location: Newfoundland and Labrador, Atlantic Canada, Hebron St. John's Hibernia Marystown Long Harbour Muskrat Falls Nova Scotia Northwest Territories

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