Canada’s annual inflation rate accelerated to an 18-year-high in August, driven by broad upward price pressures, data showed on Wednesday, just days before a hotly contested federal election that could see Prime Minister Justin Trudeau’s Liberals ousted.
The Consumer Price Index (CPI) rose 4.1% on a year-over-year basis in August, the fastest pace since March 2003, up from a 3.7% gain in July, Statistics Canada said on Wednesday.
The increase in prices mainly stems from an accumulation of recent price pressures and from lower price levels in 2020. Excluding gasoline, the CPI rose 3.2% year over year.
The monthly CPI rose 0.2% in August, down from a 0.6% increase in July. On a seasonally adjusted monthly basis, the CPI rose 0.4%.
Since the onset of the COVID-19 pandemic, durable goods have been a major contributor to the increase in the CPI. Durable goods rose at a faster pace in August (+5.7%) compared with July (+5.0%), with passenger vehicles (+7.2%), furniture (+8.7%), and household appliances (+5.3%) contributing the most to the increase.
In addition, prices for services have accelerated for the fifth consecutive month, rising at a faster pace in August (+2.7%) compared with July (+2.6%) amid easing of COVID-19 restrictions. Year over year, prices for traveller accommodation rose 19.3%. Reopening of businesses and summer travel contributed to the price increases.
Prices rose in seven of the eight major components in August, with transportation prices contributing the most to the all-items increase. Conversely, consumers paid less for clothing and footwear, as prices declined year over year.
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