Surging produce prices push inflation up in Canada

OTTAWA -- Canada's annual inflation rate hit two per cent last month as the weaker dollar continued to drive up prices for fresh fruits and vegetables, the federal statistics agency said Friday.

See Full Article

Statistics Canada's January year-over-year inflation number was up from 1.6 per cent in December.

The agency's latest consumer price index found the overall cost of food was up four per cent last month compared to a year earlier -- with fresh vegetable prices up 18.2 per cent and fruits up 12.9 per cent.

A closer look at the data shows that lettuce prices last month were 17.9 per cent higher than the year before, apples were up 16.6 per cent and tomatoes up 11.9 per cent.

"Very strong indeed -- much stronger report than what we expected," Desjardins senior economist Jimmy Jean said of the headline inflation number.

"(The increase) is largely in the usual suspects these days -- fruits and vegetables."

The annual inflation rate climbed in every province last month at a time when the weaker Canadian dollar was contributing to higher costs for imported goods. The effects of the steep decline in oil prices have played a big part in pushing down the loonie.

Year-over-year prices moved upwards in every category of the index except for clothing and footwear, which saw a decrease of 0.3 per cent compared to January 2015.

Lower prices in January for items such as natural gas, fuel oil and telephone services kept downward pressure on the inflation reading, the agency said. Natural gas was down 18.6 per cent, fuel oil down 15 per cent and telephone services 2.5 per cent.

The overall January inflation rate also hit the Bank of Canada's ideal target of 2.0 per cent.

The central bank watches the inflation rate very closely whenever it makes decisions on whether to move its benchmark interest rate. Its next policy meeting is scheduled for early next month.

The core inflation rate, which excludes some volatile items such as gasoline, had been 1.9 per cent in December.

Statistics Canada also released its most-recent retail sales data, which showed a drop of 2.2 per cent to $43.2 billion in December compared to the previous month.

The last time retail sales saw a month-over-month drop of that magnitude was April 2010, when it fell by 2.3 per cent, the agency said.

Experts said the decrease was largely due to unseasonably warm weather in December and the impact of Black Friday shopping events that led to stronger numbers in November.

Retail sales fell in almost every sub sector, with motor vehicle and parts dealers seeing the biggest decrease in dollar terms, the report said. They also went down in every province except for Prince Edward Island, where they ticked up 0.1 per cent.

By comparison, retail sales increased 1.7 per cent in November and 0.1 per cent in October.

Here's what happened in the provinces and territories. (Previous month in brackets):

  • Newfoundland and Labrador: 2.4 per cent (1.4)
  • Prince Edward Island: 1.9 (0.9)
  • Nova Scotia: 2.0 (1.2)
  • New Brunswick: 2.4 (1.1)
  • Quebec: 1.6 (1.3)
  • Ontario: 2.0 (1.7)
  • Manitoba: 2.1 (1.5)
  • Saskatchewan: 2.2 (1.8)
  • Alberta: 2.1 (1.5)
  • British Columbia: 2.3 (1.9)
  • Whitehorse, Yukon: 1.9 (0.8)
  • Yellowknife, N.W.T.: 2.0 (1.5)

The agency also released rates for major cities, but cautioned that figures may fluctuate widely because they are based on small statistical samples (Previous month in brackets):

  • St. John's, N.L.: 2.2 per cent (1.4)
  • Charlottetown-Summerside: 1.8 (0.9)
  • Halifax: 1.9 (1.2)
  • Saint John, N.B.: 2.4 (1.2)
  • Quebec: 1.5 (1.2)
  • Montreal: 1.5 (1.5)
  • Ottawa: 1.6 (1.3)
  • Toronto: 2.1 (2.0)
  • Thunder Bay, Ont.: 2.2 (1.8)
  • Winnipeg: 2.0 (1.5)
  • Regina: 2.0 (1.6)
  • Saskatoon: 2.3 (1.9)
  • Edmonton: 2.2 (1.6)
  • Calgary: 2.0 (1.5)
  • Vancouver: 2.5 (2.3)
  • Victoria: 1.9 (1.7)


Advertisements

Latest Economic News

  • Alberta energy regulator releases rules on heavy oil odours

    Economic CTV News
    CALGARY -- Alberta's energy regulator has set new rules to deal with long-standing complaints about powerful, gassy smells from heavy oil operations in the Peace River region. The rules, released late Thursday, grew out of a 2014 inquiry held by the regulator after years of complaints from people in tiny communities neighbouring the operations. Source
  • India rejects extension on pulse imports in blow to Canada's largest market

    Economic CTV News
    CALGARY -- India has rejected a long-standing exemption on pest treatment for peas and lentils in a blow to Canada's top export market for the crops. Federal Agriculture Minister spokesman Guy Gallant confirmed the Indian government has not granted another six-month exemption that would have crops fumigated on arrival, rather than before export, as has been allowed for more than a decade. Source
  • Toronto clothing brand accused of 'exploiting the homeless'

    Economic CTV News
    A Toronto clothing line facing allegations of “glorifying poverty” and “exploiting the homeless” for selling items that are branded with the words "homeless" and "change please" says it’s actually trying to help people in need. Source
  • Canada Revenue Agency expects to track down $400M in tax crackdown

    Economic CTV News
    OTTAWA -- Canadian tax authorities expect to track down $400 million this year they say are owed as part of a campaign to crack down on tax evasion by big international companies and wealthy individuals, particularly those using offshore tax havens, a top official says. Source
  • Numbers show Alberta economy improving, but no change to $10.8B deficit

    Economic CTV News
    EDMONTON -- Alberta's economy is on the road to recovery and more money is coming in, but there's no change to the government's projected $10.8-billion deficit this year. Finance Minister Joe Ceci says Alberta is going to make $1.5 billion more than expected in the current budget year which ends March 31. Source
  • Average weekly earnings increasing, but not for retail, food and accommodation workers

    Economic CBC News
    The average weekly paycheque for non-farm workers was $961 in December, Statistics Canada says, a figure that has grown by 1.2 per cent last year but belies wide differences between types of workers. Workers in information and cultural industries saw their pay packets increase the most, on average, up by more than 10 per cent last year to $1,350.48 a week. Source
  • Canadians projected to live longer, but can they afford it?

    Economic CBC News
    A new study that projects Canadians born in 2030 will live even longer than the previous generation has prompted concerns over saving enough to enjoy those bonus years. U.K. researchers' study of 35 industrialized countries was published in The Lancet on Tuesday. Source
  • Estimated 8,000 millionaires immigrated to Canada last year, report says

    Economic CBC News
    Canada attracted an estimated 8,000 millionaires last year, trailing only Australia and the United States on the list of top destinations, according to a recent report from New World Wealth. Australia drew 11,000 millionaires, while the U.S. Source
  • Lawyer referral fees to be capped in Ontario; advertising rules changing

    Economic CTV News
    TORONTO -- The body that regulates lawyers in Ontario has opted for a cap on referral fees rather than an outright ban, and made various changes to advertising rules. In a vote Thursday, benchers of the Law Society of Upper Canada decided on a yet-to-be-determined cap after considering a report from a working group that delved into the issue of advertising and referral fees -- those a lawyer pays to another lawyer for sending along a client. Source
  • Canada's biggest pulse market in doubt after India rejects extending exemption

    Economic CTV News
    CALGARY -- Canada's top export market for its multi-billion-dollar pea and lentil crops industry is in doubt after India rejected extending a long-standing exemption on pest treatments. Federal Agriculture Minister spokesman Guy Gallant confirmed the Indian government has not granted another six-month exemption that would have crops fumigated on arrival, rather than before export, as has been allowed for more than a decade. Source