Inflation eases, but food prices still spiking, survey finds

A new report from Statistics Canada says the country’s rising inflation rate is starting to ease.

The latest consumer price index shows a slight downward trend in hikes to people’s overall cost of living, but essentials like food are still getting more expensive more quickly.

StatsCan’s consumer price index reports a 5.9 per cent inflation rate in January, w down from 6.3 per cent in December.

Meanwhile, food is getting more expensive faster, rising 10.4 per cent in the last year, up from 10.1 per cent a month earlier.

The price of meat is up by seven per cent compared to last year, while chicken in particular jumped nine per cent between December and January.

Baked goods, fresh veggies and dairy are up from last year by more than 15 per cent, 14 per cent and 12 per cent respectively.

Dine-in and takeout food is more than eight per cent more expensive and rising by the month.

The survey, taken late last year, found that more than one-third of respondents were finding it difficult to meet financial needs over the last year.

About one-quarter said they couldn’t afford an unexpected expense of $500, but it varies by generation. More than half of people ages 15-34 said they are worried about affording housing compared to one-quarter of those 65 and older.

A northern Ontario-based economist at Laurentian University said inflation is easing because fuel prices are stabilizing, supply chains are operating better and COVID-19 backlogs are clearing up.

“The pandemic-related issues and war-related issues, which were largely the cause of the inflation, those are resolving themselves and, not surprisingly, inflation has come down,” said Prof. Louis-Philippe Rochon.

And Rochon said there’s no reason to think that won’t continue. He said fuel prices are expected to come down further, but said price-gouging at grocery stores is an issue that government intervention easily can solve easily.

“I think the government is aware of that and I know industry is,” said Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers.

“That's one of the long-term issues that we began talking about but we're going to start coming up with some solutions."

But Rochon said what hasn’t helped the situation at all is the Bank of Canada’s hikes on benchmark interest rates, which it has promised to pause if it’s confident that inflation is slowing down.

He said that’s been hurting people’s pockets more than anything else.

“The real problem is the Bank of Canada,” Rochon said.

“The Bank of Canada should bring interest rates down, to give workers a break.”

Rochon is speaking to the United Nations this week about why hiking interest rates will cause more harm than good to global economies.

He said he worries that, with the US Federal Reserve planning to hike interest rates again, Canada will follow suit.