Business

Canada's inflation rate rises to 5.1% — highest since 1991

Canada's inflation rate hit 5.1 per cent in January, its highest level since 1991.

Cost of everything going up fast but energy, food and transportation more than most

Inflation is at its highest level in decades and gasoline prices are one of the biggest factors in the sharply higher cost of living. (Ben Nelms/CBC)

Canada's inflation rate hit 5.1 per cent in January, its highest level since 1991.

Statistics Canada reported Wednesday that if volatile items, like food and energy, are stripped out of the numbers, the cost of living went up at a pace of 4.3 per cent. But even that toned-down figure is the highest dating back to 1999.

Grocery bills continue to rise quickly, with the price of food purchased at stores up 6.5 per cent in the year leading up to January. That's the fastest pace since 2009.

Sam Kashani has a front row seat to how inflation is top of mind for consumers right now. He's the country manager for Too Good To Go, an app that partners with local grocery stores to alert consumers about locations that are selling excess inventory at deep discounts — usually about one third of the regular price.

The service only launched in Canada last summer, but already has 200,000 users — a sign, Kashani says, of how aware consumers are to rising food costs right now.

"Almost everything sells out almost instantly; it's a bit of a scavenger hunt," he said. 

WATCH How food prices are starting to bite back: 

Food prices starting to bite back

1 year ago
Duration 0:49
Shopper Nicola Moore says skyrocketing prices for fruit and vegetables are taking a huge bite out of her budget and making her grocery bill get even longer and more expensive every week

Food isn't the only thing getting more expensive.

The cost of keeping a roof over your head also continues its ascent, as shelter costs rose by 6.2 per cent in the past year. That's the fastest increase since 1990.

Energy getting more expensive

Gasoline prices increased by 4.8 per cent during the month, and are now 31 per cent higher than they were this time last year.

Consumers tend to notice high gasoline prices when they fill up their own vehicles, but those higher costs for things like energy and transportation hit businesses too, which also filters down to the price that consumers pay for goods.

Ceendy Moscova runs the Espace Urbain clothing store in Montreal, selling goods on behalf of more than 100 artisans. While all the products are handmade and local, she knows many of them are feeling the pinch of higher costs for transportation, since fabrics are often imported from abroad.

"It is costing them extra in terms of shipping and in the product cost and their time to be able to make the products, so they have to raise their prices," she said in an interview with CBC News. "In turn ... we do have to raise our prices as well."

WATCH | How higher energy costs filter down:

How higher transportation costs affect retail prices

12 months ago
Duration 0:47
Ceendy Moscova, who runs the Boutique Espace clothing store in Montreal, says her suppliers are feeling the pinch of higher costs for things like energy and gasoline, and that filters down to the price that consumers pay.

Higher input costs for the supply chain is a recipe for even higher inflation, and energy prices are showing no signs of subsiding, economist Royce Mendes with Desjardins says.

"With energy prices continuing to rise, inflation is set to accelerate even further and is unlikely to materially slow down before April," Mendes said.

By then, Canada's central bank is expected to have raised its benchmark interest rate slightly higher, the first of many moves aimed at reining in runaway inflation.

Canada is not the only country grappling with high inflation. Supply-chain imbalances caused by the pandemic, coupled with record amounts of stimulus spending, have combined to push up inflation just about everywhere. The U.S. inflation rate hit 7.5 per cent in January — its highest level in 40 years.

While economists had been expecting Canada's rate to be high, the 5.1 per cent rate was higher than the 4.8 per cent figure that a consensus of those polled by Bloomberg had been expecting.

ABOUT THE AUTHOR

Pete Evans

Senior Business Writer

Pete Evans is the senior business writer for CBCNews.ca. Prior to coming to the CBC, his work has appeared in the Globe & Mail, the Financial Post, the Toronto Star, and Canadian Business Magazine. Twitter: @p_evans Email: pete.evans@cbc.ca

Add some “good” to your morning and evening.

A variety of newsletters you'll love, delivered straight to you.

Sign up now

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversation  Create account

Already have an account?

now