Inflation rate hits highest point in nearly 40 years
If you found you were keeping a closer eye on your money in April, you likely put off purchases in May.
Statistics Canada’s latest Consumer Price Index report shows the inflation rate in Canada was 7.7 per cent last month, the greatest year-over-year increase since January 1983. Excluding the cost of gasoline, the increase was still 6.3 per cent over May 2021.
In Ontario, the inflation rate rose to 7.8 per cent.
The last Labour Force Survey said the average hourly wage in Canada had grown 3.9 per cent in May, nowhere near the pace it would need to keep up with the rising cost of food, shelter, services, and, of course, gas.
Canadians are paying 48 per cent more at the pumps than they were one year ago because of high crude oil prices. Statistics Canada said those costs increased 12 per cent in the one month between April and May 2022.
Energy prices rose 34.8 per cent over May 2021, the most significant increase since January 2003 and again, because of the higher cost of crude.
Higher gas prices and continued disruptions in the supply chain drove up the cost of food. Canadians spent 30 per cent more on edible fats and oils, 11.7 per cent more on fish, 9 per cent more on meat, and 10.3 per cent more on fresh vegetables. Overall, the impact on your grocery bill was another 9.7 per cent.
You might have felt the pinch even more if you were travelling. Travel accommodations like hotels jumped in price by 40.2 per cent across Canada and 56.8 per cent in Ontario.
Last Thursday, Deputy Prime Minister and Finance Minister Chrystia Freeland announced $9.8-billion in measures designed to help Canadians cope with the rising cost of living. Her plan, outlined at the Empire Club in Toronto, included a boost in the Canada Workers Benefit and Old Age Security, a one-time Housing Affordability Payment of $500, a 50 per cent cut in the cost of child care by the end of 2022, and free dental care for those making less than $90,000.
However, on the heels of Wednesday’s report, the Conservative Party of Canada came out swinging against the plan. Conservative Shadow Minister for Finance Dan Albas and Conservative Shadow Minister for Innovation, Science and Industry Gerard Deltell issued a joint statement placing the blame for higher inflation on the Trudeau government.
“The inflation-driven cost-of-living crisis caused by Justin Trudeau’s reckless spending is making life harder for Canadians. Canadians are struggling to feed their families with food prices jumping by 9.7 per cent in the last year,” said the statement. “They’re struggling to afford the roof over their heads, with rents continuing to climb and the price of a home increasing by 20 per cent this year. They’re struggling to fill up their cars — and the Liberals refusing to provide any relief.”
According to a report by the International Monetary Fund in April, inflation was up in all G7 nations, with Canada posting the fourth largest increase. In the United Kingdom, the rate rose to 9 per cent, 8.3 per cent in the United States, and 7.8 per cent in Germany.
That report said Russia’s invasion of Ukraine stalled recovery from the COVID-19 pandemic, although inflation was rising beforehand.