Canada has broken a four-decade record with yearly inflation peaking to 7.7%

Jun 22 2022, 3:13 pm

It’s official — Canada has broken its own record from 1983 for year-over-year inflation with a whopping 7.7% increase.

You read that right. It hasn’t been this bad in 39 years.

Statistics Canada released its Consumer Price Index report for the year on Wednesday morning, elaborating on the ways Canadians have been hit by rising prices this past year.

“This was the largest yearly increase since January 1983 and up from a 6.8% gain in April,” the report reads.

With the exception of gasoline, the CPI saw a 5.8% increase in April, and a 6.3% year-over-year spike in May.

Chart 1: 12-month change in the Consumer Price Index (CPI) and CPI excluding gasoline

But the acceleration in May occurred mainly because of shooting gas prices.

Gasoline costs rose 12.0% in May compared to April 2022 (-0.7%). And compared to May last year, Canadians paid 48.0% more for gasoline.

We also paid more for hotels and food at restaurants (+6.8%).Chart 2: Prices increase at a faster pace in five major components

“On a monthly basis, the CPI rose 1.4% in May, following a 0.6% increase in April,” StatCan reports. “On a seasonally adjusted monthly basis, the CPI was up 1.1%, the fastest pace since the introduction of the series in 1992.”

While average hourly wages for the year rose 3.9% in May, the cost of living went up much faster. Yearly energy costs alone rose to a mind-boggling 34.8% in May. StatCan says this is the biggest one-month price spike since January, 2003.

Food

Canadians were most impacted by food and grocery prices.

Prices for edible fats and oils rose to their “largest increase on record” and fresh veggie costs also went up 10.3% in May, compared to 8.2% in April.

Frozen and fresh fish went up by 11.7% this year in May, while meat prices increased at a slower pace (+9.0%).

Travel

Traveller accommodation prices also experienced a spike this year, nearly doubling with a 40.2% increase nationally.

Ontario (56.8%), British Columbia (+43.2%), and Nova Scotia (+41.8%) showed higher travel demands across Canada in comparison to the same time last year, when COVID-19 restrictions were stricter and travel vaccine mandates were still in place.

Home

Shelter costs remained elevated in May, rising 7.4% year over year and matching the increase in April. But it looks like the market for new homes is cooling down a little.

Furnishing homes got more expensive as furniture prices rose 15.8% this year.

“The introduction of tariffs for imported bud upholstered furniture (+22.7%) from China and Vietnam, first implemented in early May 2021, have contributed to the increase in prices,” reported StatCan.

Read the full CPI report here for further details.

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