Statistics Canada has released a report indicating that the annual inflation rate in Canada is 2.1 percent. This represents a downward move from the 2.4 percent reported in June. Statistics Canada uses a CPI (Consumer Price Index) – a measure composed of key goods and services each Canadian uses – and tracks the fluctuations on these items to help determine inflationary forces.
A video further explaining the CPI can be found on the Stats Can website.
Compared to July of last year, prices were up in each of the 8 key categories that make up the Consumer Price Index. The categories with the largest increases were in alcoholic beverages & tobacco products, shelter and food.
Stats Canada noted that the increase in Shelter costs can be attributed to increased property taxes year-over-year as well as increased costs associated with home and mortgage insurance. MonsterMortgage.ca has previously discussed increases in CMHC insurance premiums (mortgage insurance).
Year over year, increases in the cost of food were mainly attributable to higher prices for meat which saw a 9.2 percent increase, and vegetables which saw a 7.5 percent increase.
Increases in cigarette prices as well as tobacco taxes were described as the main drivers behind the increase in prices of alcoholic and tobacco products.
Although year over year prices have risen, on a seasonally adjusted basis, the CPI fell 0.1 percent in July, the first decrease since October 2013.
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