Canada’s inflation rate rose at its fastest pace in almost 40 years in the year up to May, as the price of just about everything continues to go up fast.
Statistics Canada reported Wednesday that an uptick in the price of gasoline was a major factor causing the overall inflation rate to hit 7.7 per cent. Gas prices rose by 12 per cent in the month of May alone, and are up by 48 per cent compared to where they were a year ago.
Food prices were also a major factor to the upside, with grocery bills increasing by 9.7 per cent over the past year. Within the food category, the cost of edible fats and oils skyrocketed 30 per cent, the fastest increase on record.
Russia’s invasion of Ukraine is a major factor in that uptick, as Ukraine is one of the world’s leading suppliers of sunflower oil, and the war has caused shortages of the pantry staple.
WATCH | How are you dealing with high inflation?
How are you dealing with inflation?
8 hours ago
Duration 2:14
Charlottetown, P.E.I. has the highest inflation rate in Canada so CBC News hit the streets to ask people how they are coping.
Jamil Bhuya, who runs Toronto restaurant Burgers n’ Fries Forever, is feeling those increases acutely. From meat for burgers, to flour for buns and even cardboard for packaging, he’s seen the price of just about everything he needs to run his business skyrocket during the pandemic. Sharply higher costs for vegetable oils for his fryer are just the latest setback.
“We’ve seen things go up literally 50 per cent overnight and it’s been very hard to stomach,” he told CBC News in an interview. He has tried to keep prices low for his customers; he knows there is a limit to how much he can charge without losing business. “Luckily, burgers have always been kind of recession proof and even pandemic proof.”
Jamil Bhuya, who runs Toronto restaurant Burgers n’ Fries Forever, is feeling price increases acutely. From meat for burgers to flour for buns and even cardboard for packaging, he’s seen the price of just about everything he needs to run his business skyrocket during the pandemic (Nisha Patel/CBC)
The cost of home furnishings are also rising at a record-setting clip, with furniture prices increasing by 15.8 per cent in the past year, mostly due to higher input and shipping costs. A major factor in that increase was the start of tariffs of up to 300 per cent on some upholstered furniture from Vietnam and China starting last year, CBC News has reported.
Higher increase than expected
Economists had been expecting the rate to increase from a 30-year high of 6.8 per cent in April, but the numbers for May blew past those expectations. Prices increased by 1.4 per cent in the month of May alone. Seasonally adjusted, that makes May 2022 the biggest one-month jump in the inflation rate in 30 years.
“If you aren’t over 40, you have never lived through inflation like this, and unfortunately, we are not expecting much of a reprieve going forward,” TD Bank economist Leslie Preston said. “Inflation is expected to remain elevated through 2022.”
The inflation rate rose in every province, from a low of seven per cent in Saskatchewan, to an eye-watering 11.1 per cent in Prince Edward Island.
Bonnie Caldarozzi recently raised prices at the courier service she runs outside Halifax, to cover the increase in gasoline costs. (Steve Lawrence/CBC)
Atlantic Canada is seeing some of the highest inflation in the country right now, and Bonnie Caldarozzi, who runs All Points Courier service in Dartmouth, N.S., says it’s hard to stay on top of rising costs.
“I’m the same as just about everybody in the country, but running a courier company, it hits us particularly hard,” she told CBC News in an interview on Wednesday. For her, the biggest problem of late is the price of gas, which makes it “very difficult to manage a small business with transportation as your main core business.”
She recently raised her prices across the board to cover fuel costs, because customers said they’d prefer that to a temporary fuel charge that could fluctuate.
“We’re trying to reach some kind of balance between our margins and keeping our clients margins good, too.”
The price of food purchased at grocery stores has risen by 9.7 per cent in the past year, Statistics Canada says. (Ivanoh Demers/Radio-Canada)
Consumers are feeling the pinch. Laura-Marie Paynter, a single mother from Toronto, recently got a second job to bring in some extra income for herself and her teenage daughter, but she’s discovered that getting a second job has actually added to her costs in the form of having to pay more for transportation, and having to order food because she’s not at home to cook as much.
“It’s frustrating that I have to take time away from my home and my child in order to keep things in our fridge and a roof over our head,” she told the CBC in an interview.
Canada is not the only country dealing with inflation at its highest level in decades. In the U.S., the inflation rate tops eight per cent right now, and new data out of the U.K. shows the cost of living rising at a nine per cent annual clip.
While Canada’s inflation rate is going up swiftly any way you slice it, Statistics Canada made some changes recently to how it tabulates the numbers, giving increased weight to things like shelter, and adding the cost of new and used vehicles to its official index for the first time.
By the data agency’s calculations, the cost of purchasing a passenger vehicle increased by 6.8 per cent in the past year. While that’s lower than the overall inflation rate, it was nonetheless one of the major factors contributing to the higher overall increase, Statistics Canada said.
Bank of Canada now more likely to hike lending rates
The higher-than-expected inflation figure makes it all but certain that the Bank of Canada will raise its benchmark interest rate by three quarters of a percentage point at its next policy meeting in July, in an attempt to rein in runaway price increases.
The central bank slashed its lending rate to 0.25 per cent early in 2020 to stimulate the economy through the pandemic, but in recent months, it has moved aggressively to hike rates. Another 75-point hike would bring the bank’s key lending rate to 2.25 per cent, the highest it has been since the financial crisis in 2008.
While higher borrowing costs are likely to bring down inflation over time, the impact is unlikely to be swift, economist Kiefer Van Mulligen with the Canadian Chamber of Commerce said, which is why consumers and policymakers should brace for high prices to stick around.
“Interest rates began to increase in March, but monetary policy does not work overnight,” he said. “Higher interest rates can’t do much to solve some of the more critical causes of current inflation, such as supply chain problems.”
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
