Canada’s inflation rate now at 7.7% — its highest point since 1983
Canada’s inflation rate rose at its fastest pace in almost 40 years in the year up to May, as the price of just about everything continues to go up fast.
Statistics Canada reported Wednesday that an uptick in the price of gasoline was a major factor in the upswing. Gas prices rose by 12 per cent in the month of May alone, and are up by 48 per cent compared to where they were a year ago.
Food prices were also a major factor to the upside, with grocery bills increasing by 9.7 per cent over the past year. Within the food category, the cost of edible fats and oils skyrocketed 30 per cent, the fastest increase on record.
Russia’s invasion of Ukraine is a major factor in that uptick, as Ukraine is one of the world’s leading suppliers of sunflower oil, and the war has caused shortages of the pantry staple.
WATCH | How the war in Ukraine is leading to a shortage of sunflower oil:
Economists had been expecting the rate to increase from a 30-year high of 6.8 per cent in April, but the numbers for May blew past those expectations.
Canada is not the only country dealing with inflation at its highest level in decades. In the US, the inflation rate tops 8 per cent right now, and new data out of the UK shows the cost of living rising at a 9 per cent annual clip.
While Canada’s inflation rate is going up swiftly any way you slice it, Statistics Canada made some changes recently to how it tabulates the numbers. These changes caused the inflation problem to look even bigger than it used to.
The data agency updated its inflation basket to include prices for new and used vehicles in its calculations, instead of how they used to do it, which was by proxy. Statscan also adjusted its inflation basket to give added weight to shelter costs.
By the data agency’s calculations, the cost of purchasing a passenger vehicle increased by 6.8 per cent in the past year. While that’s lower than the overall inflation rate, it was nevertheless one of the major factors contributing to the higher overall increase, Statscan said.