Published on January 14, 2025
Every family gathering, without fail, includes at least one relative who drops the classic line: "Back in my day, coffee cost a dime!" Usually followed by a dramatic pause and a look that suggests you're personally responsible for the collapse of reasonable pricing.
My grandfather used to tell me about buying a full meal for a quarter, while shaking his head at my $5 Tim Hortons order. I'd nod politely while thinking, "Yeah, but Gramps, you also made 50 cents an hour and thought color TV was witchcraft."
So what's the real story? Are we getting financially hosed by history, or is this just the latest chapter in humanity's oldest hobby: complaining about prices?
The Great Price Mystery (Spoiler: It's Not Actually Mysterious)
Inflation isn't some economic conspiracy designed to make your coffee expensive. It's more like economic gravity: annoying, inevitable, and surprisingly useful when you understand how it works.
Think of it this way: if the government prints more money (which they love to do), each individual loonie becomes slightly less special. It's like bringing 50 friends to an exclusive party—suddenly being there isn't quite as impressive. When there's more money chasing the same amount of stuff, prices naturally climb.
Then there's the supply and demand dance. When everyone wants avocado toast (looking at you, millennials), but avocado farms can't keep up, prices go up. It's economics, not generational warfare—though sometimes it feels like the same thing.
Businesses have a funny habit: when costs go up, they pass them along faster than a hot potato. When costs go down? Well, prices seem to have developed a strange case of amnesia about that part.
The 10-Cent Coffee Myth (And the $20 Mortgage Reality)
Sure, Grandpa's coffee was cheap. But let's talk about his mortgage rate, which could hit 18% without anyone batting an eye. Imagine trying to buy a house today with an 18% interest rate. You'd need to sell a kidney and possibly a few other organs to make the payments.
Consider housing in 1965: a typical house cost around $12,000. Sounds amazing until you realize the average income was $2,000 a year, and many families had to choose between heating and eating most winters. That "cheap" house was actually six times his annual income—which, coincidentally, is about the same ratio as today's housing market.
So while we're paying $5 for coffee, at least we're not paying half our income in mortgage interest to banks that looked at us like we were asking to borrow the Crown Jewels.
Canada's Inflation Horror Story: The 1980s
If you want to see what real inflation looks like, ask any Canadian who lived through the early 1980s. Inflation hit 12.5% in 1981, which meant prices were basically doubling every six years. Imagine if your grocery bill went from $100 to $200 just because you waited around long enough.
People were literally stuffing money under mattresses because bank interest rates couldn't keep up with inflation. It was like playing an economic video game where the difficulty level kept increasing, but nobody told you the rules had changed.
Budget-tightening became a national sport. Families rediscovered the joys of Kraft Dinner, not by choice, but by mathematical necessity. Many Canadians still hoard canned goods—a lingering effect of watching grocery budgets evaporate in real time.
Plot Twist: Maybe Nobody Had It Easy
Here's what your grandfather won't tell you about the "good old days": sure, coffee was cheap, but so was everything else, including his paycheck. More importantly, he had about three entertainment options (radio, books, and staring at walls), while you have Netflix, smartphones, and the ability to video chat with someone in Tokyo while ordering Thai food.
Grandpa's dime bought coffee, but it couldn't buy him:
- Instant access to all human knowledge via smartphone
- Same-day delivery of pretty much anything
- The ability to work from home in pajamas
- Medical procedures that routinely save lives
- Air conditioning that doesn't require a second mortgage
The real kicker? Adjusted for inflation, that 10-cent coffee would cost about $1.20 today. Meanwhile, you can still get coffee for $1.50 at plenty of places. So technically, coffee isn't even that much more expensive—we've just developed fancier taste in our caffeine delivery systems.
The Loonie's Long Journey
Every era has its financial quirks, and every generation gets to complain about them. Your grandparents dealt with sky-high interest rates and limited choices. Your parents navigated economic recessions and the invention of credit card debt. You get to figure out housing prices that seem designed by people who hate math and love suffering.
Inflation isn't inherently evil. Modest inflation (around 2% annually) actually signals a healthy, growing economy. It means people are making more money, buying more stuff, and generally feeling optimistic about the future. It's only when inflation goes bonkers (hello, 1980s) that it becomes a problem.
Understanding that dollar amounts are meaningless without context is key. Your grandfather's 10-cent coffee wasn't cheap because money was better back then—it was cheap because everything was proportionally priced for the economy of that era.
The Real Bottom Line
Next time someone starts the "10-cent coffee" speech, you can smile knowingly and say, "Yes, but could you get that coffee delivered to your door while watching cat videos on a device that connects you to everyone in the world?"
Inflation isn't about the past being better or the present being worse—it's about economies growing, changing, and adapting over time. Every generation gets their turn to shake their heads at prices and wonder what the world is coming to.
Just remember: someday, you'll be the one telling your grandkids about the time when gas was only $1.50 a liter, and they'll roll their eyes just like you do now.
The circle of economic complaining continues. At least the coffee keeps getting better.
References
Government and Institutional Sources:
- Bank of Canada, "Historical Inflation Data" and "Monetary Policy Reports"
- Statistics Canada, "Consumer Price Index Historical Summary 1981-2025"
- Canada Mortgage and Housing Corporation, "Historical Housing Prices"
- Parliamentary Budget Officer, "Inflation Analysis and Economic Outlook"
Books:
- The Economics of Inflation by Costantino Bresciani-Turroni - Amazon Canada
- A Monetary History of the United States by Milton Friedman - Amazon Canada
- The Great Inflation and Its Aftermath by Robert Samuelson - Amazon Canada
- Inflation: Causes and Effects by Robert Hall - Amazon Canada
Historical Context:
- C.D. Howe Institute, "Canada's Inflation Experience: 1970s-2020s"
- Bank of Canada Museum, "Currency and Inflation Exhibits"
- That conversation with Grandpa every Christmas dinner