Canadian Food Prices Remain Elevated 

Canadian food prices remained stubbornly high in August, even as the overall inflation rate posted its second straight month of decline. 

The annual rate of inflation slowed to 7% in August, down from a 7.6% gain in July as gasoline prices showed a significant decline, according to a Statistics Canada report Tuesday. However, prices for food purchased from stores were still up 10.8% in August, rising at the fastest pace since August 1981 when they jumped nearly 12%. 

“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,” the federal agency said. 

Food price growth remained broad-based, StatsCan reported. On a year-over-year basis, Canadians paid more for meat (+6.5%), dairy products (+7%), bakery products (+15.4%), fresh fruit (+13.2%), and non-alcoholic beverages (+14.1%). Prices for condiments, spices, and vinegars were up 17.2%, sugar and confectionery 11.3%, and fish, seafood, and other marine products climbed 8.7%. 

Canada’s food inflation rate has been around 10% since May of this year, and a new survey released Tuesday from the Agri-Food Analytics Lab at Dalhousie University in Halifax suggests almost three out of four Canadians have made significant changes to how they grocery shop due to higher food prices. Those efforts have included using more coupons, visiting discount stores, and using more loyalty program points to pay their food bills. 

On a monthly basis, the overall inflation rate fell 0.3% in August, the largest monthly decline since the early months of the COVID-19 pandemic. Excluding gasoline, prices rose 6.3% year-over-year in August, following a 6.6% increase in July, the first month since June 2021 the year-over-year inflation rate, excluding gasoline, has slowed. 

Although the price of gas was still more than 22% higher in August than it was the same month a year earlier, it was down 9.2% compared to July – the largest monthly decline since April 2020. 

Source: DePutter Publishing Ltd.

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