'You have to make some choices': Monctonians react to inflation hike

Inflation rate increases four percent in August Canada’s inflation rate went up four per cent in August, thanks to higher gas prices. CTV’s Derek Haggett reports.

It's getting more and more difficult for Vicky Gagne to deal with inflation and the rising cost of gas.

Gagne and her partner are driving less and sometimes only using one car because fuel prices are cutting into their budget.

“It's hard. It's really, really hard,” said Gagne, while filling up at a Moncton station Tuesday morning. “Sometimes we have to pick between food or gas between me and my boyfriend.”

Canada's inflation rate has jumped from 3.3 per cent in July to four per cent in August according to a new report released by Statistic Canada on Tuesday.

The rise in inflation is largely being driven by gas prices which are up on both a yearly and monthly basis.

Bill Didychuk said he used to burn around a tank of gas every week and a half.

“Now I'm going through two tanks a week. It's just getting too expensive to drive. To go to a restaurant or anything else like that,” said Didychuk.

Tuesday’s report did state that grocery prices are still rising, but more slowly.

Grocery prices were up 6.9 per cent from a year ago compared to 8.5 per cent in August.

Prices however fell by 0.4 per cent between July and last month.

Some customers at a Moncton produce shop worry there's only so many dollars to go around right now.

“It means less going out to eat or things like that,” said Nick Smith. “You have to make some choices.”

Smith is worried what rising inflation will mean in the future for his kids.

“We're in a situation where we're fortunate enough where we own a home and things like that,” said Smith. “But I'm looking at down the road. What will the affordability be like for them in terms of rents and buying a house?”

Moncton realtor Natalie Davison said with inflation going up again now may actually be a good time for potential buyers to make a move.

“If you're in the market to buy a house, and you have a rate locked in, you really want to be cognizant of the fact that later in the year we might see interest rates go up again,” said Davison.

Davison said sometimes when a hike in interest rates is looming buyers will wait until rates come back down.

“That’s not my recommendation because when rates eventually start coming back down housing prices are going to go up. Buyers are going to rush to the market and it’s going to be way more competitive,” said Davison.

David MacDonald, a senior economist for the Centre of Policy Alternatives, said Tuesday’s report was certainly higher than what he expected.

“This is certainly bad news in terms of setting us up for interest rate hikes in the fall and winter. There was a broad expectation of 3.8 (per cent) and we're now at 4 per cent broad inflation,” said MacDonald.

The Bank of Canada is scheduled to make its next decision on interest rates on October 25.

With files from the Canadian Press

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