Canada's inflation rate was 6.9 per cent in October, matching the pace seen the previous month.
Economists had been expecting the rate to increase due to an uptick in the price of gasoline last month, but instead the data released by Statistics Canada showed the cost of living went up at the same annual pace in October as it was the previous month.
After easing off in September, gasoline prices increased again in October, pushing their annual change up to 17.8 per cent in the past 12 months. That's up from a 13.2 per cent annual pace previously.
Annual inflation remains high — but flat — at 6.9%
The price of a fill-up continues to add fuel to Canada's inflationary fire, but another major source of consumer consternation — the cost of food — is showing signs that it may finally be headed in the opposite direction.
Food prices increased by 10.1 per cent in the year up to October. That's still ahead of the overall rate, which has been the case for 11 months in a row now, but it's a slight decrease from the 10.3 per cent pace seen in September. That's an encouraging sign that Canadians may finally soon see some relief on their grocery bills.
While food inflation is showing signs of easing, that doesn't mean many prices are actually coming down yet. And that's true for consumers as much as it is for the businesses who sell food.
'This feels different'
Ian Moore, co-owner of Courage Cookies in Toronto, started his business in the early days of the pandemic, and while he's been pleased with how steadily the demand for his product has grown, he's been shocked by how fast his input costs have gone up, for things like flour, sugar and butter.
When he started in 2020, he sold his gourmet cookies for $3 each, but he recently had to raise his price to $3.50 to keep up with how much more it costs to produce each one. "I even find myself cringing like, man, is it going to be $3.75?" he told CBC News in an interview.
Early on, he and his partner committed to making sure five per cent of the store's proceeds go to charity, and he's pleased that he has managed to stick to that commitment.
But his margins are so thin that more than once in the pandemic, he has foregone paying himself a salary on payday, because he knows there's only so much that his customers can pay in terms of price hikes.
"There are normal escalations every year, and that's completely fine," he told CBC News in an interview this week. "But this feels different."
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When businesses like Moore's see higher prices for everything from butter and flour to rent for the store and gasoline to fulfil deliveries, it creates price pressures up and down the system.
That's what leads to price hikes for consumers, and it underscores just how hard it can be to tame inflation once it gets out of hand. "It creates a snowball effect. If one thing goes up, everything does have to go up," he said.
'Inflation is so insidious'
Economist Royce Mendes with Desjardins says the pressure that businesses like Moore's bakery is under is a great example of "why inflation is so insidious."
"Once inflation gets into the system, it's very difficult to eradicate because price pressures in one area of the economy inevitably translate into price pressures in other sectors of the economy," he told CBC News in an interview.
Mendes says he was pleased to see the official inflation number come in lower than anticipated, even if prices for things that Canadians spend a lot of time and money on — food and gasoline — are still high.
"Things like food and shelter are impossible to substitute away from; they are really the core of anyone's consumption basket. And that means that we can't avoid price increases in those categories," he said.
The good news, he says, is that the data released Wednesday shows that inflation is clearly coming down, albeit slowly.
"What is really beneath the surface here is that the momentum in prices does appear to be slowing even if Canadians didn't feel the benefit of that in October."