cost of living posts

So you're no longer shelling out for diapers and you've not yet hit the stage when Tommy or Talia is asking to borrow the car. But your pre-teen is still costing you an arm and a leg. How much? It's an important question to get a handle on as Canadians look to tighten their belts amidst worries of another economic downturn. Food, shelter, Hunger Games novels, it all adds up. By some estimates, the cost of raising a child from the cradle to "goodbye, see you at Thanksgiving," is a whopping $240,000. So here's a snapshot of the cost of a year in the life of your tween darling.

SLIDESHOW: HOW MUCH DOES IT COST TO BE A FIFTH GRADER?

How Much Does it Cost to Be... a Fifth Grader
(STORY IN TEXT FORM CONTINUES BELOW)

A record low increase in core consumer prices was the last thing economists expected to see, especially given recent advances in the Canadian economy. However, a record low increase is what we got, taking the pressure off the Bank of Canada to raise interest rates anytime soon.

Core inflation -- a measure of the cost of living -- rose only 0.9% in the 12 months ended February, the lowest reading since records began in 1984. In fact, a reading that low would usually cause the Bank of Canada to lower interest rates to stimulate the economy and price increases.

Increases to the minimum wage in Canada hurt the very people they are supposed to help, according to a new report by the Canadian Federation of Independent Business (CFIB), an association for small to medium-sized businesses.

The group argues that provincially regulated increases to minimum wages cause small businesses to either cut jobs, reduce staff hours or postpone new hires. Using their own estimates, they say a 10% increase in minimum wages against all provinces would cost the Canadian economy up to 321,300 jobs.

"At a time when the economy is in slow recovery, the last thing governments should be considering are policies that further hinder job creation," said Marilyn Braun-Pollon, CFIB's Vice President for Saskatchewan and co-author of the report.

The Bank of Canada is predicted to keep interest rates on hold when it makes its January announcement on Tuesday.

However, the experts say rates will likely rise in the coming months as the central bank attempts to prevent a crippling rise in personal debt.

According to a Reuters poll, Canada's leading interest rate strategists all expect the benchmark interest rate to remain at 1 per cent this week, allowing the economy more time to adjust to the last rate hike in September at a time when the U.S. economy -- Canada's biggest trade partner -- is still struggling to create jobs and recover from recession.

The central bank last raised the benchmark interest rate in September following quarter point rises in June and July. Prior to that, the key interest rate had sat at a record low 0.25 per cent for 13 months to ease the impact of recession on the economy and encourage the flow of money through the almost stagnant financial system.

The cost of money is on the rise. Mortgage rates are starting to increase with the Royal Bank of Canada and Bank of Nova Scotia hiking the cost of borrowing on Tuesday for the second time in two weeks, paving the way for other banks to follow suit.

The Financial Post reports that five year closed fixed-rate mortgage rates at both banks now stand at 6.10%, up from 5.25% less than three weeks ago. All major banks raised mortgage rates by 65 basis points last month and those that have not yet hiked again are expected to do so in the near future.

So what lies ahead?

The countdown to an interest rate hike is on. Expectations of a rate rise grew even stronger Friday after official figures showed that the cost of living is rising faster than it should be.

The surprising news caused the Canadian dollar to jump above US99 cents as investors began to bet that an interest rate rise is close at hand. With the way the Canadian economy is going, it looks like U.S. dollar parity is inevitable.

The Bank of Canada has previously promised it would keep the key interest rate on hold at the record low level of 0.25% until at least the end of June, but the promise came with a 'Get Out of Jail Free' card that basically says it can raise rates sooner if inflation, or the rising cost of living, becomes a problem.