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Annual grocery price increases continue to far outpace Canada’s overall inflation

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1 year ago

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Rosa Saba, The Canadian Press


Published Tuesday, August 15, 2023 3:48PM EDT


Last Updated Tuesday, August 15, 2023 3:56PM EDT

Grocery prices are still rising at a far higher annual pace than overall inflation, but experts expect to see them continue moderating as the year progresses.

The price of groceries grew 8.5 per cent in July compared with last year, down from a 9.1 per cent year-over-year gain in June, according to Statistics Canada. The slower growth was mainly thanks to easing prices in the fresh fruit and bakery products categories, the agency said.

Eight and a half per cent is still a far cry from the headline inflation reading of 3.3 per cent in July, which has significantly fallen from a high of more than eight per cent last year.

But looking at the year-over-year increase in food prices doesn’t tell the whole story, said Michael von Massow, a food economy professor at the University of Guelph in Ontario.

Some of the biggest monthly increases in food prices happened last fall, meaning the annual rate of food inflation is skewed by those, he said. On a month-over-month basis, grocery prices actually rose slower than overall inflation in July.

However, there’s no question that food prices are still rising, albeit slower, he said, and that consumers are feeling the pinch.

“We can’t defer food purchases,” he said. “We can change our behaviour with driving if we want, we can defer the purchase of a new computer … but we can’t defer food.”

As the months wear on, the annual rate of food inflation is likely going to keep trending lower since it will increasingly factor out last fall’s oversized increases, von Massow explained.

The Bank of Canada’s interest rate hikes don’t have a direct effect on food inflation but can indirectly pressure consumers to spend less at restaurants or grocery stores, said von Massow – but only to a certain extent.

There’s some reason for optimism in the coming months, as seasonal harvests in Canada could help ease the cost of some fruits and vegetables, said von Massow. But food prices are also much more vulnerable to the effects of extreme weather, and could also be impacted by the war in Ukraine as Russia exited its grain export deal, he said.

“The one thing we can be sure of is there’s going to be more volatility.”

Food price inflation is expected to continue easing in the coming months as lower commodity prices and easing supply chain pressures pass through to retail products, said RBC economist Claire Fan. Overall food price inflation is expected to fall closer to five per cent by the end of the year, she said.

While prices are still much higher than they were a year ago, consumers can at least look forward to fewer surprises at the grocery store, Fan said.

However, over the longer term, extreme weather around the world will add more pressure to food prices, she said.

Some forecasters are saying the latest inflation report has raised the odds of an interest rate hike next month from the Bank of Canada.

A hike isn’t entirely out of the question, but there’s more economic data to come before the central bank makes its decision, Marwa Abdou, senior research director at the Canadian Chamber of Commerce, said in a statement.

“So much of the downward momentum and cooling that we’ve seen over the past few months has been overstated progress from soaring gas prices a year ago,” Abdou said.

“While those effects have now peaked, and heftier grocery bills, mortgage interest rate costs and energy prices remaining a pain point for Canadian consumers, we’re now getting a chance to focus on the real work that remains ahead.”

Meanwhile, Fan says the central bank is likely to hold rates at its next meeting in September, opting to wait for more economic data as the economy shows signs of weakening in key areas like the labour market.

“From this point forward, the bar to keep moving interest rates higher is quite high,” she said.

This report by The Canadian Press was first published Aug. 15, 2023.

 

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Carry On Canadian Business. Carry On!

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8 hours ago

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October 22, 2024

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business to start in Canada

Human Resources Officers must be very busy these days what with the general turnover of employees in our retail and business sectors. It is hard enough to find skilled people let alone potential employees willing to be trained. Then after the training, a few weeks go by then they come to you and ask for a raise. You refuse as there simply is no excess money in the budget and away they fly to wherever they come from, trained but not willing to put in the time to achieve that wanted raise.

I have had potentials come in and we give them a test to see if they do indeed know how to weld, polish or work with wood. 2-10 we hire, and one of those is gone in a week or two. Ask that they want overtime, and their laughter leaving the building is loud and unsettling. Housing starts are doing well but way behind because those trades needed to finish a project simply don’t come to the site, with delay after delay. Some people’s attitudes are just too funny. A recent graduate from a Ivy League university came in for an interview. The position was mid-management potential, but when we told them a three month period was needed and then they would make the big bucks they disappeared as fast as they arrived.

Government agencies are really no help, sending us people unsuited or unwilling to carry out the jobs we offer. Handing money over to staffing firms whose referrals are weak and ineffectual. Perhaps with the Fall and Winter upon us, these folks will have to find work and stop playing on the golf course or cottaging away. Tried to hire new arrivals in Canada but it is truly difficult to find someone who has a real identity card and is approved to live and work here. Who do we hire? Several years ago my father’s firm was rocking and rolling with all sorts of work. It was a summer day when the immigration officers arrived and 30+ employees hit the bricks almost immediately. The investigation that followed had threats of fines thrown at us by the officials. Good thing we kept excellent records, photos and digital copies. We had to prove the illegal documents given to us were as good as the real McCoy.

Restauranteurs, builders, manufacturers, finishers, trades-based firms, and warehousing are all suspect in hiring illegals, yet that becomes secondary as Toronto increases its minimum wage again bringing our payroll up another $120,000. Survival in Canada’s financial and business sectors is questionable for many. Good luck Chuck!. at least your carbon tax refund check should be arriving soon.

Steven Kaszab
Bradford, Ontario
skaszab@yahoo.ca

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Imperial to cut prices in NWT community after low river prevented resupply by barges

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11 hours ago

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October 22, 2024

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NORMAN WELLS, N.W.T. – Imperial Oil says it will temporarily reduce its fuel prices in a Northwest Territories community that has seen costs skyrocket due to low water on the Mackenzie River forcing the cancellation of the summer barge resupply season.

Imperial says in a Facebook post it will cut the air transportation portion that’s included in its wholesale price in Norman Wells for diesel fuel, or heating oil, from $3.38 per litre to $1.69 per litre, starting Tuesday.

The air transportation increase, it further states, will be implemented over a longer period.

It says Imperial is closely monitoring how much fuel needs to be airlifted to the Norman Wells area to prevent runouts until the winter road season begins and supplies can be replenished.

Gasoline and heating fuel prices approached $5 a litre at the start of this month.

Norman Wells’ town council declared a local emergency on humanitarian grounds last week as some of its 700 residents said they were facing monthly fuel bills coming to more than $5,000.

“The wholesale price increase that Imperial has applied is strictly to cover the air transportation costs. There is no Imperial profit margin included on the wholesale price. Imperial does not set prices at the retail level,” Imperial’s statement on Monday said.

The statement further said Imperial is working closely with the Northwest Territories government on ways to help residents in the near term.

“Imperial Oil’s decision to lower the price of home heating fuel offers immediate relief to residents facing financial pressures. This step reflects a swift response by Imperial Oil to discussions with the GNWT and will help ease short-term financial burdens on residents,” Caroline Wawzonek, Deputy Premier and Minister of Finance and Infrastructure, said in a news release Monday.

Wawzonek also noted the Territories government has supported the community with implementation of a fund supporting businesses and communities impacted by barge cancellations. She said there have also been increases to the Senior Home Heating Subsidy in Norman Wells, and continued support for heating costs for eligible Income Assistance recipients.

Additionally, she said the government has donated $150,000 to the Norman Wells food bank.

In its declaration of a state of emergency, the town said the mayor and council recognized the recent hike in fuel prices has strained household budgets, raised transportation costs, and affected local businesses.

It added that for the next three months, water and sewer service fees will be waived for all residents and businesses.

This report by The Canadian Press was first published Oct. 21, 2024.

The Canadian Press. All rights reserved.

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U.S. vote has Canadian business leaders worried about protectionist policies: KPMG

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11 hours ago

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October 22, 2024

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TORONTO – A new report says many Canadian business leaders are worried about economic uncertainties related to the looming U.S. election.

The survey by KPMG in Canada of 735 small- and medium-sized businesses says 87 per cent fear the Canadian economy could become “collateral damage” from American protectionist policies that lead to less favourable trade deals and increased tariffs

It says that due to those concerns, 85 per cent of business leaders in Canada polled are reviewing their business strategies to prepare for a change in leadership.

The concerns are primarily being felt by larger Canadian companies and sectors that are highly integrated with the U.S. economy, such as manufacturing, automotive, transportation and warehousing, energy and natural resources, as well as technology, media and telecommunications.

Shaira Nanji, a KPMG Law partner in its tax practice, says the prospect of further changes to economic and trade policies in the U.S. means some Canadian firms will need to look for ways to mitigate added costs and take advantage of potential trade relief provisions to remain competitive.

Both presidential candidates have campaigned on protectionist policies that could cause uncertainty for Canadian trade, and whoever takes the White House will be in charge during the review of the United States-Mexico-Canada Agreement in 2026.

This report by The Canadian Press was first published Oct. 22, 2024.

The Canadian Press. All rights reserved.

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