Canada’s inflation rate once again climbed in August, prompting some Calgarians to make tough decisions about their spending.
“It’s stressful, right? Like I have a wife looking to have children in the near future but it’s almost, it’s off-putting to want to have children because how am I going to provide for them?” Craig Steward said.
John Burley added, “It’s just about trying to make ends meet for the budget and trying to pick and choose what you do, like no sports activities or less Flames games, less doing things out on date night, things like that.”
Canada’s inflation rate rose to four per cent in August from 3.3 per cent in July.
Gas prices are driving the increase, rising 0.8 per cent from last August — the first yearly increase since January.
“Oil prices increased in August to over $80 a barrel, and we haven’t seen it reach that level since last year, so it’s a pretty big change over the lower prices that we previously saw, and that’s entirely the reason for the increase,” said Trevor Tombe, economics professor at the University of Calgary.
Alberta’s inflation rate is even higher than the national average at 4.3 per cent.
Energy prices also increased the most in Alberta, going up just over 13 per cent year-over-year in August, following a nearly eight per cent drop in July.
Tombe, however, says not to read too much into that.
“The price of many energy products in Alberta is lower than what we see elsewhere. It’s even lower now in August this year — if you look just at gasoline alone — it’s lower here than it was last August,” he said.
But Tombe says electricity is the exception.
According to Statistics Canada, electricity prices rose almost 122 per cent in Alberta this August compared to last, following a large price increase in July.
The end of the province’s electricity rebate program is a big part of that.
Nathan Neudorf, Alberta’s minister of affordability and utilities, says he recognizes that the benefit of high oil prices needs to be passed down from the government to all Albertans.
“Making sure that affordability and the cost of living, key input costs like utilities, are managed and brought down to their lowest, most competitive level and that’s what what we’re going to do to make sure Albertans see the benefit of that,” he said.
Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce, wants affordability measures like electricity rebates and the gas tax suspension to continue.
“There’s a bigger bite being taken out of consumers’ pocketbooks, and so they’re going to think about where they allocate their capital, where they’re going to spend their money and you know, that’s businesses that are going to be affected by that,” she said.
For Bank of Canada watchers, Tombe says this latest data is somewhat concerning since the main core measures of three-month average inflation, which is what the central bank looks at when setting interest rates, all rose above four per cent for the first time since last year.
“But I think it might be too early at this point to judge whether any further interest rate increases are on the horizon,” he said.
The Bank of Canada will make its next interest rate decision on Oct. 25.
