Gasoline, food push inflation to 3.1 per cent in August
Inflation hit 3.1 per cent in Canada last month, driven largely by higher prices for food and gasoline, according to new numbers from Statistics Canada released Wednesday.
The new rate is four points higher than a year earlier, StatsCan said.
A range of consumer goods, including passenger vehicles, electricity, jewelry, telephone services and homeowners' home and mortgage insurance all saw significant price increases -- largely accounting for the 4-point rise compared to the rate a year earlier.
Among the most aggressive climbers, energy prices rose 13.4 per cent in the year leading up to August and gasoline prices went up 22.8 per cent.
Food prices were up 4.4 per cent in August.
The core inflation rate was at 1.9 per cent, just under the Bank of Canada's target of 2 per cent.
Craig Alexander, of TD Financial Group, said he expects inflation to moderate towards the end of the year and as a result, prices should begin to come back down.
However, he said the steadily rising cost of living is worrisome.
"I think the real discouraging thing in the inflation numbers we're getting is that when you look at the employment numbers… quite frankly wages are not keeping up with the cost of inflation," he told CTV News Channel.
Essentially, Alexander said, many Canadians have to stretch their paycheque further as inflation increases at a faster pace than wages.
The unexpectedly strong increases in consumer goods run contrary to a recent trend that saw inflation moderating -- falling from 3.7 per cent in May to 2.7 per cent in July.
Core or underlying inflation, which excludes volatile items such as energy and some foods, increased to 1.9 from 1.6 per cent, pushing close to the central bank's 2 per cent target.
On Wednesday, NDP MP Peggy Nash called on the Conservative government to help the two million Canadians who are unemployed or underemployed and are feeling the squeeze.
"There are rising costs of food, gas. This is creating additional pressure on family budgets," Nash said during question period in the House of Commons. "The Conservatives are very generous with the oil companies, but why aren't they doing more for families?"
Finance Minister Jim Flaherty accused the NDP of wanting to raise taxes on Canadian businesses, "which we all know will be passed along, as part of the cost of doing business, on individuals. Now that's inflationary for Canadian families."
On Tuesday, Bank of Canada Governor Mark Carney said he was not concerned about inflation and would not raise interest rates to deal with the issue.
The bank's mandate is to keep consumer prices within a range of one and three per cent, and as close to two as possible.
Here's what happened to the inflation rate in each of the provinces and territories. (Previous month in brackets):
- Newfoundland and Labrador 3.6 (3.4)
- Prince Edward Island 3.5 (3.2)
- Nova Scotia 3.8 (3.5)
- New Brunswick 4.1 (3.8)
- Quebec 3.4 (3.3)
- Ontario 3.1 (3.0)
- Manitoba 3.0 (3.1)
- Saskatchewan 2.8 (2.8)
- Alberta 2.9 (1.9)
- British Columbia 2.1 (1.7)
- Whitehorse, Yukon 3.0 (3.1)
- Yellowknife, N.W.T., 3.4 (3.4)
- Iqaluit, Nunavut 1.2 (1.1)
The agency also released rates for major cities, but cautioned that figures may fluctuate widely because they are based on small statistical samples (Previous month in brackets):
- St. John's, N.L., 3.4 (3.2)
- Charlottetown-Summerside, 3.2 (2.8)
- Halifax, 3.5 (3.2)
- Saint John, N.B., 4.0 (3.8)
- Quebec, 3.4 (3.2)
- Montreal, 3.2 (3.1)
- Ottawa, 2.9 (2.7)
- Toronto, 2.9 (2.8)
- Thunder Bay, Ont., 3.1 (2.9)
- Winnipeg, 3.0 (3.0)
- Regina, 2.9 (2.9)
- Saskatoon, 2.4 (2.4)
- Edmonton, 3.0 (1.9)
- Calgary, 2.6 (1.8)
- Vancouver, 1.7 (1.6)
- Victoria, 1.9 (1.6)
With files from The Canadian Press