Inflation in Canada Falls to Almost 7.5% | Canada News Media
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Inflation in Canada Falls to Almost 7.5%

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Inflation in Canada Falls to Almost 7.5%

According to the latest Canadian consumer price index, inflation has fallen to 7.5% since June 2021, from a 39-year high of 8.1%. This also marks the first time the inflation rate has fallen in the last 12 months, which might be the break in the clouds consumers were hoping for. Gas, in particular, was a significant concern for most as bills hit over $1,000 per month, which is a record high and unsustainable for most.

However, in places like Ontario, the provincial government implemented a fuel tax cut which eased prices by 12.2%, another ray of sunshine for Canadians. But is this the same trend in other places around the world?

This article will look at the inflation decrease in Canada and what it might mean. So keep reading to learn more

What Does it Mean Compared With Other Countries?

It’s easy to look at this decreasing number and say that inflation is going down. But one thing to remember is that we are facing a multi-decade high similar to the situation back in the early 80s. Gas prices have started to decrease, but it will also take time for the decrease to translate to other sectors, such as household goods.

Because the Canadian economy and most other economies worldwide rely on truck transport, the cheaper cost of moving goods will start to be felt in the coming months. Interest rates might not fall immediately, but you can expect them to once the economy starts showing signs of revitalization. The country’s goods will also become internationally competitive again, improving exports and spurring GDP growth. And not just in Canada but in most parts of the world.

For instance, if we look at our direct neighbours, prices have started to stabilise, and employers are opening up to hiring new workers. The US is also looking to revitalise its domestic manufacturing industry by investing in more manufacturing back home moving forward. It recently announced that it would build a semiconductor manufacturing plant in Arizona, amongst other things.

Furthermore, people sending money back home have had to cope with high exchange rates and transaction fees. For instance, since the Euro dropped, Canadians living in Europe have felt the pinch, but with the falling inflation rate, they hope this won’t last long. In most cases, the process of sending money to Canada is much cheaper when you use an online money transfer provider. A process that more and more Canadians have started to trust and appreciate.

Due to Inflation, What are the Most Expensive Products in Canada?

As with many inflations, the price of gas, food and housing are usually the most affected, and this period is no different. Gas at petrol stations went up 32.3% compared to the same time last year. This affected most consumer goods as trucking companies had to adjust their running costs to reflect market conditions which then got transferred to you at the checkout counter.

And for the first time in 13 years, Canadians had to think about what they were putting in their shopping carts as groceries were up by a whopping 7.4%. Furthermore, during the same period, the price of housing went up by 6.6%, which is also a record high only ever witnessed in the 80s. In addition, moving homes was even more challenging as the price of appliances increased by 9.4%, making things even more complicated for the average Canadian.

Inflation is here to stay

High inflation has gripped most parts of Canada and, indeed, the world. But, as authorities and different sectors of the economies implement strategies to mitigate its effects, we think it might be working as we witness the first fall in the last 12 months. However, this is not to say that we are out of the woods yet; far from it. We should tighten our belts, watch our spending, and spur our leaders to do more to help ease the economic struggles for all.

Economy

Canada’s unemployment rate holds steady at 6.5% in October, economy adds 15,000 jobs

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OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.

Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.

Business, building and support services saw the largest gain in employment.

Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.

Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.

Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.

Friday’s report also shed some light on the financial health of households.

According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.

That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.

People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.

That compares with just under a quarter of those living in an owned home by a household member.

Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.

That compares with about three in 10 more established immigrants and one in four of people born in Canada.

This report by The Canadian Press was first published Nov. 8, 2024.

The Canadian Press. All rights reserved.

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Economy

Health-care spending expected to outpace economy and reach $372 billion in 2024: CIHI

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The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.

The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.

CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.

This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.

While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.

Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.

The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.

This report by The Canadian Press was first published Nov. 7, 2024.

Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.

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Trump’s victory sparks concerns over ripple effect on Canadian economy

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As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.

Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.

A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.

More than 77 per cent of Canadian exports go to the U.S.

Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.

“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.

“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”

American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.

It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.

“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.

“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”

A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.

Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.

“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.

Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.

With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”

“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.

“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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