Inflation relief felt largely at gas pumps; rising cost of food remains a struggle

Rising food costs are prompting desperate measures Calgarians are struggling with ever-climbing food prices, looking to save wherever they can. Food bank demand has also been unusually high.

Canada's headline inflation rate is coming down, but the relief being felt by consumers is largely centred around the gasoline pump.

The latest figures from Statistics Canada show annual inflation rose just 2.8 per cent in June 2023, slowing from 3.4 per cent in May.

That's a dramatic improvement from the 8.1 per cent peak Canadians suffered through last summer.

By comparison, Alberta's headline inflation is 1.9 per cent.

Offset by lower energy costs, it is one of the lowest rates in Canada.

Gasoline prices have declined nearly 22 per cent since last June, when global energy markets spiked in reaction to Russia's invasion of Ukraine.

But Canadians continue to pay substantially more for groceries, as prices rose 9.1 per cent in June compared to last year.

Fresh fruit is up 10.4 per cent — a jump from 5.4 per cent in May, driven largely by a whopping 30 per cent month-over-month increase in the price of grapes.

The cost of meat jumped 6.9 per cent, while baked goods rose 12.9 per cent.

Food prices in Alberta rose 7.9 per cent, slightly less than the national average.

Freestone Produce in northeast Calgary sells its products at a steep discount and even allows people to buy in bulk.

"If we make a dollar on something, we make a dollar on something. We're not trying to make max profit on anything, we want to help people out," said manager Wael Soufan.

The discount store says it has noticed a sharp increase in demand over the past few months as food prices continue to skyrocket.

"We've just been getting busier and busier," Soufan said.

Typically, the Calgary Food Bank sees a slowdown in the summer months, but not this year.

"We actually saw a 47 per cent increase year-over-year in food bank users, and so that equated to us distributing emergency food hampers to over 14,000 households in the month of June alone," said Melissa From, CEO of the Calgary Food Bank.

"This is no longer an issue that's just affecting people who are maybe living below the poverty line or living hand to mouth. I think we're all seeing the effects of this."

Mortgage costs, meanwhile, climbed a staggering 30.1 per cent in June, putting additional strain on the already tight budget of millions of Canadians.

Anupam Das, economics professor at Mount Royal University, says the core inflation rate, which is calculated by stripping away volatile food and energy prices, is hovering between 3.5 and 4.0 per cent.

That's well above the Bank of Canada's two per cent target, so Canadians could be facing another interest rate hike.

But Das questions whether that approach has helped combat food inflation.

"Clearly, it has not been working. I mean, the central bank has increased the interest rate for quite a while now, but food prices have remained very stubborn," he said.

"I really think it's time to evaluate all the policies, all the tools that we have to fight inflation."

The next rate decision is scheduled for September.

With files from The Canadian Press.