The rising cost of food and gas once again fuelled the country's inflation rate, helping it to hold steady at 2.9 per cent in November, Statistics Canada reported Tuesday.

The cost of food rose sharply in the last year, the agency reported. Those costs rose by 4.8 per cent in November on an annual basis – the highest annual gain in since July 2009.

Consumers saw double-digit increases for many basic food items: fresh vegetables were up 13.2 per cent; bread was up 11.9 per cent, while the cost of meat rose 6.2 per cent over the years.

The cost of driving was also higher, with the cost of gas rising 13.5 per cent in November from a year earlier. But on a month-to-month basis, Canadians paid 2.3 per cent less for gas in last month than they did in October.

"The increase in November was the smallest year-over-year gain since the beginning of 2011," the agency said.

Still, gasoline continues to be a key driver of annual inflation, even though gas price inflation is actually on a downward track, after peaking in May at close to 30 per cent.

The cost of fuel oil increased 24.4 per cent in November on an annual basis, after gaining 22.1 per cent in October.

Overall, consumer prices rose in every province in November, with the largest gain recorded in Newfoundland and Labrador.

BNN's Kim Parlee points out that while these increases to food and transportation costs might not be hurting middle and upper-middle class Canadians, they are likely hitting lower-income Canadians hard.

"These numbers, if they continue, could be disastrous to someone who is trying to manage a budget," she told CTV News Channel.

The Bank of Canada likes to keep inflation between 1 and 3 per cent. Although the overall inflation rate is getting close to that upper limit, the central bank has repeatedly stressed that it is not worried about inflation. It's more worried that the effects of a weakening global economy will eventually slow growth in Canada.

The Bank of Canada's core index, which excludes eight of the Consumer Price Index's most volatile components, such as fuel costs, rose 2.1 per cent in the 12 months to November, the same rise seen in October.

That's also higher than its target for core inflation, but in its most recent report on the state of the economy, the central bank said it expects overall inflation to decline to one per cent by mid-2012. It's expecting gas prices to decline, easing pressure on consumer prices.

In its most recent report on the state of the economy, the central bank said it expects overall inflation to decline to one per cent by mid-2012.