Canada’s annual inflation rate: 2.9% in January [Video]

Statistics Canada released its Consumer Price Index report for January this week, and the numbers say the inflation rate for the first month of the new year was 2.9 per cent.

In December, that number was a bit higher at 3.4 per cent.

According to the report, gas prices declined, airfare was down and grocery prices increased — albeit at a slower pace.

The price of gasoline had a considerable sway over the numbers.

StatsCan says that when compared to this time last year, prices at the pump had increased amid the ongoing refinery closures in the southwestern United States following Winter Storm Elliott.

However, when gasoline is removed from the equation, inflation sits at 3.2 per cent.

While the cost of food continues to increase, certain year-over-year growth rates have slowed. The price of soup, bacon, shrimps and prawns have all reached lower levels of growth in January.
University of Toronto Professor Laurence Booth is cautiously optimistic.

“The prices of food aren’t coming down. all that’s happening is the prices of food are not going up as fast as they were in the past,” he said.

“We’re within the range now of the governments agreement with the Bank of Canada and we are zeroing in on the actual 2 per cent, the mid point of that target.”

Director of the Agri-Food Analytics Lab at Dalhousie University, Sylvian Charlebois, says when it comes to food, they also track numbers but are not seeing the same trend.

“We actually think that egg prices in general it went up 7 per cent, but that’s not what Statistics Canada is telling us today. It’s telling us that its less than one per cent. So if you believe Statistics Canada, egg prices aren’t moving a lot. But that’s not what we are seeing.”

He also says Statistics Canada does not necessarily take into account “shrinkflation.”

“The size for margarine containers, based on their report is 907 grams. Well the average margarine container is 850 grams.”

Another steep decline that was reported by StatsCan was the cost for cellular services.

On a monthly basis, prices rose 6.7 per cent, but when compared to the year-over-year basis, prices for cellular services fell 16.4 per cent in January, following a 26.8 per cent decline in December.

The full report is available on the StatsCan website and can be read here.

These numbers also play into the Bank of Canada’s decision on its key interest rate, though experts expect the rate to hold at five per cent when announced on March 6.