Canada’s inflation rate fell to 2.8 per cent in June, its lowest level in more than two years.
Statistics Canada said a sharp decline in the price of gasoline compared with this time last year was the biggest reason for the drop, which brought Canada’s official inflation rate down to its lowest point since March 2021.
Gasoline prices were 21 per cent lower during the month than they were the same month a year earlier.
Another factor pushing down the increase in the cost of living was telecommunications services, which fell by 14.7 per cent compared with what they were a year ago.
“This was a result of both lower prices for cellular data plans and promotional pricing,” Statistics Canada said.
Prices for internet access fall
Rogers finalized its purchase of rival Shaw in April, and at least in the short term, the result has been a flurry of promotional offers between the telecom giants.
The data agency noted that prices for internet access fell by 3.2 per cent in the past year and by five per cent in the month of June alone — the biggest one-month plunge since 2019.
“This was mostly due to promotions in Ontario and lower prices in Quebec,” Statistics Canada said.
On the other side of the ledger, food and mortgage costs were the biggest single factors pushing the rate higher. The cost of food continues to increase at a pace of more than nine per cent. Coming on the heels of the annual increase up to June of last year, that means the price of food has gone up by almost 20 per cent in two years. That’s the fastest pace of increase in the price to fill up a grocery cart in more than 40 years, TD Bank economist Leslie Preston noted.
And mortgage interest costs are also making things a lot more expensive, up by more than 30 per cent in the past year.
The fresh inflation data comes just days after the Bank of Canada decided to hike its benchmark interest rate, for the 10th time in little more than a year, as part of its campaign to wrestle inflation into submission.
What’s behind all the aggressive interest rate hikes?
The Bank of Canada raised interest rates again, but several indicators — like inflation – show it may not have been needed. CBC’s senior business reporter Peter Armstrong explains why it happened and what comes next.
The bank justified its decision by saying more tightening was needed to get inflation back to its two per cent target. The inflation rate peaked last June at 8.1 per cent and was 3.4 per cent last month.
While it’s an encouraging sign to see the official inflation number dip back into the range of between one and three per cent that the Bank of Canada targets, there’s ample reason to think it may be a lot harder to get inflation to go lower from here.
If gasoline is stripped out of the data, the headline inflation rate would have been four per cent. If food is stripped out, the inflation rate would have been 1.7 per cent. If mortgage costs aren’t counted, the rate would have been two per cent.
Those are great examples of why the central bank pays less attention to the headline number — because it is easily skewed by individual items that can be volatile — and pays more attention to so-called core inflation, which smooths out the noise. Of the three core inflation measures the bank tabulates, all declined, but one is still above five per cent, while the other two are barely below four per cent.
Royce Mendes, an economist with Desjardins, says it’s too early to think that the official rate will simply slide back down to target by itself, since the drop in June was based on one-time items that probably can’t be repeated.
“The latest moves have been predicated on sharp declines in cellphone services prices, which doesn’t provide any assurance that this deceleration can be maintained,” he said. Mendes said he thinks inflation could heat up again in the coming months once the “one-off” price drops for things like gasoline and cellular services are gone.
Andrew Grantham, senior economist with CIBC, says he wouldn’t be surprised to see the official inflation rate inch higher in the coming months, once the year-ago comparisons become less favourable.
“Headline inflation will likely creep back further above three per cent in the coming months, as base effects from lower gasoline prices become less generous,” he said.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
