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The major drivers of inflation remain gasoline and food. They were up 22.7 per cent and 4.3 per cent respectively from a year ago. Cost of Living

Food, gas prices push inflation rate higher

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CTV Calgary: Gas and food prices on the rise
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Dawn Desjardins, an economist with RBC, explains how the core inflation is shooting up by 2.2 per cent. She also discusses the European debt crisis and key meetings that will take place this weekend.

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The major drivers of inflation remain gasoline and food. They were up 22.7 per cent and 4.3 per cent respectively from a year ago. Cost of Living

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The major drivers of inflation remain gasoline and food. They were up 22.7 per cent and 4.3 per cent respectively from a year ago.

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It will be interesting to see if the government increases by the same amount the Canada Pension checks. In the past few years CPP increases has been less then the consumer price index(CPI) which is supposed to be the benchmark for the annual increases.

Frank in NS

Food, gas prices push inflation rate higher

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Food, gas prices push inflation rate higher

Date: Fri. Oct. 21 2011 6:55 PM ET

Canada's inflation rate edged up a notch last month, as Canadians paid more for most things last month, Statistics Canada reported Friday.

Consumer prices rose 3.2 per cent in September, while the country's annual core inflation shot up three-tenths of a point to 2.2 per cent.

Statistics Canada says all eight major components it tracks -- from housing to clothing to recreation costs -- were higher last month on an annual basis.

As has been the case so often before, the major drivers of the rising inflation rate last month were gasoline and food.

The cost of gas was up 22.7 per cent over last year, while prices for fuel oil rose 27.4 per cent and prices for natural gas fell 4.7 per cent.

Prices for food were 4.3 per cent from a year ago, overall. Consumers paid more for meat, with prices up 6.1 per cent; bakery products, which rose 7.2 per cent; and fresh vegetables, which soared 13.0 per cent.

Statistics Canada notes that the country's underlying core inflation increased to its highest level in almost three years in September.

The core inflation rate excludes volatile items, such as gasoline, and is considered a more accurate reflection of inflation trends.

The annual core rate rose three-tenths of a point to 2.2 per cent -- the largest year-over-year gain since December 2008. It's the first time it's been above the Bank of Canada's two per cent target since February 2010.

Commenting on the numbers, David Madani of the research firm Capital Economic predicted in a note to clients that the consumer price index will continue to rise "somewhat above" the Bank of Canada's expectations, and that inflation on food prices will reach at least six per cent by next year.

Still, while the jump in core inflation will likely raise some eyebrows at the central bank, few expect bank governor Mark Carney to raise interest rates next week.

"We still believe the Bank will refrain from removing any further monetary stimulus for the foreseeable future," wrote Madani.

Some even expect Carney to cut rates. But in a note to his clients, Bank of Montreal's Doug Porter says the "stickiness" of inflation makes this unlikely.

"While this result doesn't completely rule out rate cuts, it relegates them to only the most extreme circumstance," he said in the note.

"Moreover, if core stays close to this level -- let alone rises further -- the Bank of Canada may return to the tightening wheel sooner than most now expect, especially if financial markets stabilize."

The central bank has held its policy rate at one per cent for over a year and Carney has made it clear he is remaining vigilant for signs of weakness of the economy, as well as keeping an eye on the European debt crisis and the potential for another global recession.  

Comments are now closed for this story

Mark - Calgary
said

Go and Occupy said "Our government should be making regulations to help us live our lives, and not struggle to have our basic needs"If you mean price controls, history has shown that price controls have never worked. By the way, your oil giants create tens of thousands of jobs, you know.


Go and Occupy
said

I sincerely hope not a person who has an issue with the prices of gas, heat and food, also disagrees with those in the streets protesting...
Our government should be making regulations to help us live our lives, and not struggle to have our basic needs.... instead they spend their time protecting the oil giants, helping them stuff their pockets.
It's time we all speak up... It's time for a revolution. It's time our government was accountable to us, and not the billionaires of this world.



Stretched thin in ottawa
said

And people wonder why people are in the streets protesting... My pay is not increasing as the rate of inflation.. And that makes it harder and harder to stretch a dollar.. Gas, food and hydro are killing me and my family. We dont go on vacations or buy new cars.. I dont own an iphone.. or have a big screen TV!!! We dont eat out or go to the movies.. These have become luxuries that we can not afford. I havent bought myself a pair of shoes in almost 3 years


Rose
said

Seems every time there is a new war the price of Gas/Oil goes up. Seems the Corporate Gas/Oil profiteering, companies take over the oil in said countries which sold the oil at reasonable prices and inflate them to a higher rate. Eliminate the competition, raise the prices. Has no one else ever noticed this trend.


gary hoodle
said

revenue canada is out to get every penny out of every person that they can by threatning penaltys by using very questionable tactics.I realy am realy surprised more people havent complained by how it has become the norm to be scewed by revenue canada


Maury Finkelstein
said

It's really sad to go to the grocery stores these days with prices so ballistic. Average Canadians (the ones without guaranteed pensions and benefits) struggle to pay for life's necessities and shop frugally as civil servants and politicians hog the cookie jar and taxes to pay for their salaries, pension plans, medical benefits, bonuses. Canada's guilded class have no problem plopping $9.99 watermelons into their shopping carts because they have a never-ending power grab muscle on the "little people's" money. I know seniors that count on Zeller's 1.99 Ravioli to feed themselves through the week. Shameful. Canada is a very corrupt nation. Income disparity that works for some but does not for many!


Harper to blame
said

How does it bode well for this country & our economy if we are all working just to pay for the necessities like FOOD & HEATING & TRANSPORTATION?wth is Harper doing in his ivory tower other than telling us 'don't worry' while he hands over billions of our tax dollars to his true love, the Americans?


Craig from NS
said

Note to the conservative government: Although I am no fan of unions; striking Canada Post employees and (possible) striking employees at Air Canada have less of an impact to our fragile economy than does the high price of oil/gas. The economy really went in to the tank in 2008 a year after the price of oil started go go crazy. Fix the oil / gas price issue in our resource rich country and the economy will take off.


Sober
said

And who do we thank for it? Dalton McGuinty and his HST on gas that pushes the price of everything higher.


JP
said

Here we go again, this wont end its only going to get worse over the next year. You think we pay to much for homes and gasoline now, just wait cause in 6 months from now we will see gas prices soar and groceries go threw the roof. This Government seems hell bent on breaking the backs of the middle class and they are well on the way to doing so. Its only a matter of time before the straw breaks the camels back, and when it does look out!!! the worst of it is, some people still walk around like theres nothing wrong with this world and they continue to keep the blinders on.


Gut
said

This country has never seen a revolution yet. I don't beleive Canadians have the will to do anything but whine about prices. So why are they not just bending over grabbing there ankles and shutting there traps. Qiut blaming goverment when you live in a democracy


Judy in B.C.
said

How do you figure 2.2 or 3.2% increase when you total all the increases and it comes to 83%. Who is the gov't trying to kid. Do they think we are all a lot of dumbells? Come on give the people a increase substantial to the 83%. I don't expect 83% but 2.2 is ridiculous.


Jeremy
said

I don't know why or how, but I am still paying too much for gas, and too much for home heating oil considering we live in an energy surplus country. Way to go Mr. Harper, keep up the good job of creating climates for big oil to gouge us


Lindsay
said

CMQ,refiners are taking larger margins on gasoline, even though crude is not up from a year ago.
Evidently this is allowed and we are led to believe higher energy prices is good for our economy.
This does not and will not help most people as it will erode disposable incomes. Most people need gasoline and groceries, but they will have to cut back on other expenses like dining out and vacationing , as well as holding off on other discretionary spending. The other fallout from higher pump prices is higher taxes, as most cities have fleet vehicles and equipment to fuel. Higher energy prices will not lead the economy out of recession.


Bob in Calgary
said

Sure, the big oil boys have to get the big money 22% over last year. Between Harper and oil companies we are SCREWED


CMQ
said

So why is gas up 22.7% over last year when we are paying the same price or less per barrel as last year? We are being so taken at the pumps. Here in the east pump prices jumped 4 cents this week even though oil prices remained steady. My family now pays for 3 for groceries what we used to pay for 6 just a few years ago!!!!!


Robert B
said

Well people, its like this at the RCSS bananas from 29 cents to 79 cents a lb. frozen orange juice from 1.08 to 1.58 a can in 1 week, imperial margerine from 2 for 6.00 to 1 for 5.99, tomatoes from 1.00 to 2.00 a lb etc, etc. these items are no longer on my list, I don't buy my meats in stores. screw those crooked price gauging idiots, and although I may have said some disparaging things about those Protestors, all the more power to them if only they would find out what exactly the hell they are doing and for what.!!!!!!!!!


KJ in Kingston Ontario
said

With the growth rate at about half the inflation rate it is just a matter of time before the bottom falls out of this economy. Low interest rates (LESS THAN THE REAL INFLATION RATE) should be illegal. They make no economic sense what so ever.


M
said

Dictators beware


me
said

I agree with Maggie Scott....Here in Nanaimo the prices are outrageous. Gas has gone up 10 cents/litre just this month. Real estate prices are way too high and unemployment hovers around 10%. That's down from the 15% it used to be.


lc
said

Meanwhile arms dealer GE profit soar 57%.The bankers and WMDS manufacturers have not seen heady days like these since they were funding the Nazi war machine.


Rob
said

Just to save everyone some time...Stupid tree hugging Liberals caused this by handing out free money to drug addicts.Stupid Harper caused this because he only helps the rich.


NR
said

Gosh! How happy are the Corporate Sector and the Banking Sector? Their profit graphs are getting closer to the vertical; and they boast of their humongous profit making. Yes, they are riding on the back of the "Goose that lays the golden eggs". The overburdened "Goose" may not be able to shoulder this load for very much longer. One can only hope and pray that the spectre of the "Goose" doesn't follow the route of some of the European countries that are in economic turmoil.


We Know Why For Sure - Ottawa
said

Guess that is why we here in Ontario are a "have not" Province...this Liberal Party has driven many with their wild spending to drive many to "food banks"...and many ending up at the Soup Kitchens...while this Liberal Party gave themselves large raises when they came into power...what a mess of this once great Province.


Dave in Sarnia
said

This is exactly why you have folks demonstrating in the streets, wages for the middle class are not keeping up with COLA (cost of living allowance) or even CPI (consumer price index) which means that very slowly the standard of living is dropping.Those at higher incomes may not notice so much but anyone with larger families or families that are at the lower end of the income spectrum are really feeling the pinch.It is only a sign of things to come people. Corporations, in order to meet financial objectives for their shareholders, are doing everything in their power to beat the working wages down. They even have the assistance of Lisa Raitt and the conservative government to call upon if the blue collars don't tow the line - just by-pass Canadian Labour law and make up the rules as they see fit!!!! Wake up and smell the coffee, people.


Barry Atkinson
said

CPP increases by the overall CPI, not the core CPI. In recent years the core has been the higher of the two indices. Hence CPP increases have been less than core CPI. This year CPP increases will be greater than core CPI. (The index used for annual increases is the one for October).Pet peeve: consumer prices did NOT increase by 3.3% IN September,(as stated in the article) they increased by that amount in the year ENDING in September. That's a very different thing.


Maggie Scott
said

Only 2.2% nationally? Very hard to believe as my parents in Nanaimo have seen massive increases in the price of basic food items and I in Calgary find everything gone up in price.. This is hy I now make my own bread, grew my own vegetables in the summer and am doing without a lot of "luxury" items, like meat.


eddytoronto
said

Official inflation measures are rigged in order to hold down cost of living adjustments to Social Security recipients, thus saving money for War....I think the current rate of inflation in North America is from 9% to11.5%....Thus savers are losing between 3.9% and 4.4% of their capital yearly....The favored mega rich, the one percent that has captured all of the income gains of recent years, the rest of North America has been assigned to the trash can. Nothing whatsoever has been done for them since the financial crisis hit in December 2007. Harper ,Obama and Bush have focused on saving the 1 percent while giving the finger to the 99 percent....Lol....Occupy Wall Street has spread. What will be the fate of this movement?Will the snow and ice of cold weather end the protests or send them into public buildings?


Wendy
said

Way to go steady hand Steve more money out of our pockets, while PU Steve keeps spending our hard earned tax dollars. Looks like Steve's dreams will come true. You won't recognize Canada when I'm done, thanks Steve but I don't like the fact that your bankrupting our country.


Time for change
said

Funny that with our efforts to vote governments to look out for our interests, when the times are tough, what we are all forced to deal with is higher costs for absolutely everything, and yet it's the 1% that get the breaks. No... nothing wrong with this at all is there?


FOOL ME
said

BS by anyother name.


Frank in NS
said

It will be interesting to see if the government increases by the same amount the Canada Pension checks. In the past few years CPP increases has been less then the consumer price index(CPI) which is supposed to be the benchmark for the annual increases.


Frank Buchan
said

It is indeed worrisome that in a retracting work market, in a situation where the global economic pressures are almost all tilting downward, core inflation is rising. That goes to show his disconnected the mechanisms that used to regulate inflation have actually become. And a large part of this is decades of poor policy decisions at various (and all) levels of government. Sadly, it's also probably the tip of the iceberg, since taxation seems the primary goal of all governments, rather than a rational rethinking of unsustainable services. And, no, I am not one of those anti-tax types who always think lowering taxes is wise; I just note that how you spend the money taxed from the economy is vital to growing it, and none of the levels of government are spending wisely. Inflation will continue to inch upward as long as the imbalances are exacerbated by public spending, rather than levelled.


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