Connect with us

Economy

How expensive are food products getting in Canada? A breakdown of some popular items

Published

2 minute read

By Adena Ali

Canadians can’t seem to catch a break at the grocery store as food prices continue to soar. Statistics Canada reported Wednesday that food prices rose 7.4 per cent in February compared with a year ago. The rise came as the annual inflation rate climbed to 5.7 per cent, the highest it’s been since 1991.

While some economists forecast a slowdown in inflation in the back half of the year, there is more price pressure to come before we get there.

“Unfortunately, we’re likely to see further acceleration in inflation in March,” says Josh Nye, senior economist at RBC.

Statistics Canada also highlighted dairy products in the consumer price index release because they were one of the biggest contributors to February’s price gains. The rise in the price of dairy products can partly be attributed to the Canadian Dairy Commission’s decision to increase the farm gate milk price by six cents per litre on Feb. 1.

Here’s a breakdown of how much the prices for some popular food items rose between February 2021 and February 2022:

Milk: 6.6 per cent

Eggs: 7.2 per cent

Chicken: 10.4 per cent

Beef: 16.8 per cent

Bacon: 16.1 per cent

Apples: 5.3 per cent

Oranges: 9.4 per cent

Bananas: 3.7 per cent

Other fresh fruit and vegetables: 3.8 per cent

Bread, rolls, buns: 3.7 per cent

Coffee: 8.5 per cent

Nut butter: 5.6 per cent

Potato chips and other snacks: 5.8 per cent

Beer purchased from stores: 3.6 per cent

Wine purchased from stores: 2.1 per cent

Liquor purchased from stores: 1.0 per cent

Baby food: 4.3 per cent

Delivery app services (includes delivery from grocery stores and restaurants): 1.4 per cent

— With files from Jordan Press in Ottawa.

This report by The Canadian Press was first published March 16, 2022.

Storytelling is in our DNA. We provide credible, compelling multimedia storytelling and services in English and French to help captivate your digital, broadcast and print audiences. As Canada’s national news agency for 100 years, we give Canadians an unbiased news source, driven by truth, accuracy and timeliness.

Follow Author

Business

Here’s what another Bank of Canada rate hike means for Canadians

Published on

By Tara Deschamps in Toronto

The Bank of Canada hiked its key interest rate by a quarter of a percentage point Wednesday, bringing it to 4.5 per cent — the highest it’s been since 2007.

The increase marks the eighth consecutive rate hike since the central bank began raising from near-zero in March.

The Bank of Canada said Wednesday that it expects this to be the last rate hike of the cycle.

The rate hikes are intended to reduce stubbornly high inflation, which peaked over the summer and has been steadily declining since, but many economists feel the shock to the economy could lead to a recession.

Here’s a look at what the rate means, how analysts are interpreting it and what it could mean for consumers.

What is the key policy rate and what does it do?

The key policy rate, also known as the target for the overnight rate, is how much interest the Bank of Canada wants commercial banks to charge when lending each other money overnight to settle daily balances.

Knowing how much it costs to lend money, or to deposit it with the central bank, helps set the interest rates charged on things like loans and mortgages.

Lowering the rate generally makes borrowing money more affordable, while raising it makes such activities more expensive.

Why is the bank using the rate to target inflation?

Inflation is a measure of how much the prices of goods and services are rising or falling. High inflation is a sign of an economy that’s overheating.

Canada’s annual inflation rate reached a peak of 8.1 per cent in June, the highest level in four decades.

It has eased since then, reaching 6.8 per cent in November and 6.3 per cent in December. And shoppers have seen even higher price increases for common expenses like groceries. Grocery prices have been rising at the fastest pace in decades and were 11 per cent higher in December than they were a year ago.

Economists and the central bank want to see a further easing of inflation, which is why interest rates have been rising so quickly in the hope of cooling consumer spending patterns.

“Inflation is still too high and short-term inflation expectations remain elevated,” the bank said in its most recent announcement. “The longer that consumers and businesses expect inflation to be above the target, the greater the risk that elevated inflation becomes entrenched.”

What does this mean for my mortgage?

Mortgage rates tend to increase or decrease in tandem with interest rates.

When Canadians buy homes there are two kinds of mortgages they can select — fixed rate or variable. Fixed-rate mortgages allow borrowers to lock in the interest rate they will pay for a set amount of time, while variable-rate mortgages can fluctuate.

After the Bank of Canada’s rate hike on Wednesday, prime rates can be expected to rise to 6.7 per cent and variable rates will be set at about 5.75 per cent and above, said Leah Zlatkin, a mortgage broker with LowestRates.ca.

Assuming their mortgage has a 25-year amortization and they had a 15 per cent down payment, she said a homeowner with a variable mortgage rate of 5.45 per cent on a home priced at $700,000 will have a monthly mortgage payment of around $3,716.

The same mortgage at 5.7 per cent will see monthly mortgage payments increase to about $3,805, a $89 jump per month, she added.

“This will put greater pressure on an already struggling housing market,” Zlatkin said in a news release.

“For homeowners in Ontario who are seeing increased property taxes in addition to rate hikes, it’s likely this will be the worst squeeze homeowners have felt yet.”

This report by The Canadian Press was first published Jan. 25, 2022.

Continue Reading

Business

Fiscal room tightening as economy teeters, associate finance minister says

Published on

By Mia Rabson in Hamilton

Canada’s associate finance minister says it’s going to be a “turbulent” year for the economy, but Randy Boissonault insists the government still has some spending room for big priorities including a new health-care deal with the provinces.

Boissonnault was speaking before the cabinet meets on the second of a three-day cabinet retreat in Hamilton, Ont. Finance Minister Chrystia Freeland is set to give an economic update to cabinet later Tuesday.

“There’s lots of uncertainty,” Boissonnault said. “So we’re going to be watching this every step of the way as we get ready for budget (2023). We still have fiscal room to be able to do the things we need to do but the fiscal room has tightened.”

He said the war in Ukraine and inflation are among the issues causing both uncertainty and economic harm.

On Monday, a joint report from the Business Council of Canada and Bennett Jones warned that the fiscal forecast laid out in the last federal budget and the fall economic statement was likely too rosy.

The report, written by former Bank of Canada governor David Dodge and former Liberal finance policy adviser Robert Asselin, said the government’s forecast was based on a “plausible but optimistic” set of economic and interest-rate assumptions that are unlikely to come true.

They warn there is a “high likelihood of a more severe recession” this year and that the Liberal promises on everything from health-care funding and enhanced national defence spending to infrastructure improvements and climate change are going to cost a lot more than projected.

Boissonnault said that report is one of many the government will look to as it makes its economic forecast ahead of the next budget. He said he thinks the fiscal reality will fall somewhere between the best- and worst-case scenarios laid out in the fall economic statement.

Prime Minister Justin Trudeau has said affordability and making Canada competitive were his priorities heading into this cabinet meeting.

Ongoing talks with the provinces for a new health funding deal are also front and centre and are one of the issues that could change the government’s spending plans. The provinces have asked for billions over the next decade to bring their health systems back from the brink of collapse.

Ottawa is insisting on accountability for any new health funding and Trudeau has not publicly committed to meet the premiers’ demands.

Trudeau started his day Tuesday meeting with Hamilton Mayor Andrea Horwath, the former leader of Ontario’s NDP. The pair said housing was among their chief topics of conversation.

Housing prices and a lack of affordable housing in particular have become a key issue for governments at every level.

The cabinet meeting in Hamilton comes as it prepares for the return of Parliament next week. The industrial city, known predominantly as a steel town, is also one of the most competitive politically, particularly between the Liberals the NDP. The Liberals won three of the four seats in Hamilton proper in 2021, edging out the NDP in one seat that party had held since 2006.

Cabinet was also given a sharp reminder of the loud opposition they face among a group known as the “freedom convoy.” A small protest greeted Trudeau Monday afternoon as he arrived.

A larger group, about three dozen or so, returned in the evening, where they waved flags, yelled and set off fireworks — including some they appeared to aim at the building.

Most disbanded by 11 p.m. but at least one protester spent most of the night honking his horn off and on, reminiscent of the air horns from the big rigs that blocked much of downtown Ottawa for three weeks almost a year ago.

This coming weekend will mark the one-year anniversary of the convoy’s arrival in Ottawa. The weeks-long blockade and accompanying blockades at several border crossings prompted Trudeau to invoke the Emergencies Act for the first time since it replaced the War Measures Act in 1988.

The final report from the public inquiry into that decision is due in February.

This report by The Canadian Press was first published Jan. 24, 2023.

Continue Reading

Trending

X