Canada's inflation rate eases to 7% but food prices continue to soar

Canada’s inflation rate slowed to 7% in August, but food costs continue to spike, according to Statistics Canada’s latest report.

That rate is down from 7.6% in July, the second consecutive cooling that was largely driven by one thing — lower gas prices.

“Year over year, gasoline prices rose less in August (+22.1%) compared with July (+35.6%),” reads the agency’s report, which was released on Tuesday. “On a monthly basis, gasoline prices fell 9.6% following a decline in July (-9.2%).”

StatsCan says this was the largest monthly drop in gas prices since April 2020.

In August, the Consumer Price Index (#CPI) rose 7.0% on a year-over-year basis, down from a 7.6% gain in July. To learn more: https://t.co/Y8HjSE20eH. pic.twitter.com/tclU9BCBsj

— Statistics Canada (@StatCan_eng) September 20, 2022

What other costs cooled down in August?

Transportation and real estate prices also continued to cool. According to StatsCan, the slow growth of prices in these sectors also “drove the deceleration in consumer prices in August.”

The rise in passenger vehicle prices slowed to 7.3% in August, down from an 8.2% increase in July.

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The rise in home prices also cooled to 7.4%, compared to 9.7% in July.

“These movements reflect a general cooling of the housing market,” stated StatsCan.

Prices for household appliances like refrigerators and freezers (+12.0%), laundry and dishwashing appliances (+9.3%), and cooking appliances (+7.9%) also cooled down.

Grocery costs rise at their fastest pace

According to StatsCan, prices for food bought from stores continued to spike in August at 10.8%, rising at its fastest pace since 1981.

“The supply of food continued to be impacted by multiple factors, including extreme weather, higher input costs, Russia’s invasion of Ukraine, and supply chain disruptions,” reads the report.

In fact, the continued rise in food prices has pushed four in five Canadians to believe that grocery stores are taking advantage of inflation to make more profit, according to a recent Angus Reid survey.

StatsCan states that Canadians paid more for meat (+6.5%), dairy products (+7.0%), bakery products (+15.4%), fresh fruit (+13.2%), non-alcoholic beverages (+14.1%), condiments, spices, and vinegars (+17.2%), sugar and confectionery (+11.3%), and fish, seafood, and other marine products (+8.7%).