Canadian inflation made an unexpected surge last month. Statistics Canada (Stat Can) data shows the Consumer Price Index (CPI) jumped in July. The measure of inflation accelerated after a brief pause the month before. Housing once again played a big role in the acceleration of the cost of living.
Canadians Saw Their Cost of Living Rise The Most Since 2003
Canada is experiencing some of the highest inflation it’s seen in nearly two decades. Annual CPI growth reached 3.7% in July, up from 3.1% in June. The agency said if gasoline was excluded, the rate falls to 2.8% though. Obviously, a third of your cost of living increase was gasoline, and the basket is perfect. That aside, it was the highest annual rate of growth since 2003.
Canadian Consumer Price Index (CPI)
The annual rate of growth for the Canadian consumer price index (CPI).
Source: Stat Can; Better Dwelling.
Shelter Costs Soar, Helping To Push Inflation Much Higher
Rising shelter costs attributed a significant amount of lift to the CPI. The shelter component showed an annual increase of 4.4% in July, up from 4.4% the previous month. We are definitely seeing an acceleration in this segment. Though it appears six of the major components have seen an increase. Shelter happens to be one of the largest influences on the index.
Canadian Homeowner Replacment Costs
The annual rate of growth for homeowner replacement costs, as reported in the Canadian consumer price index (CPI).
Source: Stat Can; Better Dwelling.
One Large Component of Shelter Inflation Is Soaring At The Highest Level Since The 80s
Special attention should be paid to homeowner replacement costs. They showed annual growth of 13.8% in July, up from 12.9% a month before. It was the highest rate of growth since 1987! This segment is a big portion of CPI, so it shouldn’t be hard to see how this was driving the trend.
Canadian inflation is soaring, and there are some signs it isn’t just transitory. A previous change in methodology last month had economists worried about underreporting inflation. The fundamental argument still exists, but inflation continues to chug higher. If underreporting exists, that’s a heck of an increase that just occurred. It’s no wonder the cost of living is now the highest priority for households during this election.
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Just consider the maintenance costs of your million dollar house. The repair of the roof, the boiler, the yard maintenance, property tax is all going up, up, up. The house is the liability, and the sub-inflation mortgage payment is probably the asset nowadays.
Prepare for organization of growing food in winter inside …might help… work with each other for space…
This is a self enforcing loop, the higher inflation goes the more people invest in non cash assets to combat inflation. To lower prices simple tax people or corporations that own multiple properties.