In June, inflation hit a 39-year high of 8.1%, with gasoline prices the only contributor to the overall rate increase. In contrast, gasoline prices fell on a monthly basis in July, according to the agency’s Consumer Price Index. Consumers paid 9.2 percent less for gasoline in July than in June, a monthly decline not seen since April 2020. Ontario saw a 12.2 per cent monthly drop in natural gas prices – the largest of any province – after the provincial government implemented a gas and fuel tax cut on July 1. The overall downward trend, which economists had been expecting, shows that soaring inflation is starting to ease. But it’s still a long way from the Bank of Canada’s 2.2 per cent target.
Groceries rise at fastest pace since August 1981
Even as gas costs fell, grocery prices rose 9.9 percent year-over-year, their fastest pace since August 1981. Bakery products, soft drinks, eggs and fresh fruit are among the fastest growing items. Baked goods in particular rose 13.6%, as Russia’s invasion of Ukraine helped boost wheat prices. Higher prices for services such as flights, restaurant meals and hotel stays were notable contributors to the month-on-month increase due to the busier travel season. Monthly rent is also rising, according to the StatsCan report. With high interest rates crowding out buyers who can’t afford mortgages, the rental market has expanded and rents are accelerating at a faster rate than in June.
