Inflation in Canada rose 5.7% in February 2022, the biggest increase since August 1991, according to the latest Statistics Canada data released on Wednesday.
February marked the second consecutive month in which headline inflation rose above 5%.
Excluding gasoline, the Consumer Price Index (CPI) rose 4.7% year-over-year in February, outpacing the increase recorded in January 2022 (+4.3%) which corresponded the largest increase in the index since 1999.
Statistics Canada estimates that February’s price increase was widespread, putting pressure on Canadians’ budgets. “Consumers paid more for gasoline and groceries in February 2022 compared to the same month the year before,” it said.
“It’s not just an impression, everything is really getting more expensive. (…) Energy prices in Canada were once more a major driver of the overall increase in February, but that didn’t even include the recent surge in global energy prices in response to the invasion of Ukraine by Russia”, analyzed Royce Mendes, managing director and head of macroeconomic strategy for Desjardins.
As of Tuesday, gasoline prices “were regarding 11% higher than they were at the end of February,” Mendes said.
Food prices have also been the focus of attention as commodity prices rise on concerns over global supply. In addition, domestic dairy prices jumped in response to the Canadian Dairy Commission’s increase, which helped push overall food prices up 1.3% in February.
The upward trend in shelter costs also continued in February, and in fact recorded the largest year-over-year increase since August 1983.
Between January and February, the CPI increased by 1%, corresponding to “the largest increase observed since February 2013”, noted the federal agency.
In Quebec, the CPI rose 5.4% year over year. On a monthly basis, it increased by 1.1% between January and February.
Residents of Prince Edward Island have to deal with the worst inflation rate in the country, which reached 7.4% over one year, followed by Ontario (6.1%), Manitoba (6.1%) and New Brunswick (6%).
“Inflation is expected to pick up further with further price pressures emanating from the war in Ukraine and possible new waves of COVID-19 disrupting supply chains,” added Royce Mendes, estimating that the Bank of Canada might announce further rate hikes.