Canadians are paying more for groceries and tuition fees
Consumer prices in Canada have been deeply affected by the COVID-19 pandemic and global events such as the war in Ukraine. Statistics Canada reported Wednesday that the Consumer Price Index (CPI) rose 6.9% on a year-over-year basis in September. This is marginally lower than the 7% increase reported the month before. However, Canadians continued to feel the pinch from higher food prices. Moreover, students pay more for tuition fees in 2022.
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Canadians pay more for many grocery items
According to Statistics Canada, the price of food purchased from stores (+11.4%) has increased continuously for 10 consecutive months (since December 2021). Moreover, on a year-over-year basis, Canadians paid more for the following items:
|Grocery items||12-month % change|
|Cereal products (excluding baby food)||17.9|
|Coffee and tea||16.4|
|Condiments, spices and vinegars||12.6|
|Other food preparations||11.7|
Statistics Canada said that factors such as unfavourable weather, higher prices for important inputs (fertilizers and natural gas), as well as geopolitical instability, contributed to food and beverage price increases.
On the other hand, prices at the gas pump dropped in September compared with August. Gasoline prices dropped 7.4% in September following a 9.6% decrease in August. This is the third consecutive month-over-month price decline for gasoline.
In terms of prices for durable goods, such as passenger vehicles, they increased faster in September (+6.7%) compared with August (+6.0%), on a year-over-year basis. Also, prices for furniture increased at a faster pace on a year-over-year basis in September (+13.3%) compared with August (+12.2%), mainly driven by higher prices for other furniture (+10.3%), specifically mattresses.
Students pay more for tuition fees in 2022
Priced annually, tuition fees rose 2.3% in September 2022 compared with September 2021 (+1.9%). The largest increases were seen in Alberta, Newfoundland and Labrador and Saskatchewan.
- Year-over-year major tuition price changes, 12-month % change:
|Provinces||September 2021||September 2022|
|Newfoundland and Labrador||0.8||6.8|
|Prince Edward Island||2.2||2.5|
Canada in the following months
On October 19, 2022, Finance Minister Chrystia Freeland warned people in Canada that the coming months won’t be pretty as rising interest rates slow a once red-hot economy and force some people out of their jobs.
According to Freeland, recent rate hikes by the Bank of Canada to fight sky-high inflation will increase the borrowing cost for businesses and consumers, and its impact will run throughout the economy.
“Our economy will slow. There will be people whose mortgage rates will rise. Businesses will no longer be booming. Our unemployment rate will no longer be at its record low. That’s going to be the case in Canada. That will be the case in the U.S. and that will be the case in economies big and small around the world,” Freeland said.
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