Cost of everything going up fast but energy, food and transportation more than most
Pete Evans · CBC News
Canada’s inflation rate hit 5.1 per cent in January, its highest level since 1991.
Statistics Canada reported Wednesday that if volatile items, like food and energy, are stripped out of the numbers, the cost of living went up at a pace of 4.3 per cent. But even that toned-down figure is the highest dating back to 1999.
Grocery bills continue to rise quickly, with the price of food purchased at stores up 6.5 per cent in the year leading up to January. That’s the fastest pace since 2009.
Sam Kashani has a front row seat to how inflation is top of mind for consumers right now. He’s the country manager for Too Good To Go, an app that partners with local grocery stores to alert consumers about locations that are selling excess inventory at deep discounts — usually about one third of the regular price.
The service only launched in Canada last summer, but already has 200,000 users — a sign, Kashani says, of how aware consumers are to rising food costs right now.
“Almost everything sells out almost instantly; it’s a bit of a scavenger hunt,” he said.
Food isn’t the only thing getting more expensive.
The cost of keeping a roof over your head also continues its ascent, as shelter costs rose by 6.2 per cent in the past year. That’s the fastest increase since 1990.
Energy getting more expensive
Gasoline prices increased by 4.8 per cent during the month, and are now 31 per cent higher than they were this time last year.
Consumers tend to notice high gasoline prices when they fill up their own vehicles, but those higher costs for things like energy and transportation hit businesses too, which also filters down to the price that consumers pay for goods.
Ceendy Moscova runs the Espace Urbain clothing store in Montreal, selling goods on behalf of more than 100 artisans. While all the products are handmade and local, she knows many of them are feeling the pinch of higher costs for transportation, since fabrics are often imported from abroad.
“It is costing them extra in terms of shipping and in the product cost and their time to be able to make the products, so they have to raise their prices,” she said in an interview with CBC News. “In turn … we do have to raise our prices as well.”
Higher input costs for the supply chain is a recipe for even higher inflation, and energy prices are showing no signs of subsiding, economist Royce Mendes with Desjardins says.
“With energy prices continuing to rise, inflation is set to accelerate even further and is unlikely to materially slow down before April,” Mendes said.
By then, Canada’s central bank is expected to have raised its benchmark interest rate slightly higher, the first of many moves aimed at reining in runaway inflation.https://datawrapper.dwcdn.net/6IvZA/1/
Canada is not the only country grappling with high inflation. Supply-chain imbalances caused by the pandemic, coupled with record amounts of stimulus spending, have combined to push up inflation just about everywhere. The U.S. inflation rate hit 7.5 per cent in January — its highest level in 40 years.
While economists had been expecting Canada’s rate to be high, the 5.1 per cent rate was higher than the 4.8 per cent figure that a consensus of those polled by Bloomberg had been expecting.