The climbing cost of living in Canada will likely get worse before it gets better any time soon, according to ATB’s chief economist.
Statistics Canada said inflation rose 7.7 per cent in May, the highest level it’s reached in nearly 40 years. Alberta’s inflation rate sits at 7.1 per cent, while Calgary’s reached eight per cent in May compared to the same time last year, StatCan reported.
“I think the main takeaway is things are going to get worse before they get better,” said ATB chief economist Rob Roach.
“The May inflation numbers are kind of eye-popping.”
Energy and gas prices are the biggest drivers of inflation across the country, but nearly everything is more expensive now than it was a year ago.
Gasoline prices jumped 48 per cent while energy prices climbed 34.8 per cent.
Food prices at grocery stores also increased, up 9.7 per cent, with the cost of edible fats and oils climbing by 30 per cent and vegetables up 10.3 per cent.
“The rise is significant, but it’s also quite violent,” said Sylvain Charlebois, a food policy professor at Dalhousie University.
“Food banks are feeling the pressure. Normal people who have never visited food banks before are going to food banks right now because prices are rising so quickly,” he said.
Roach said we could see The Bank of Canada increase interest rates again in an effort to slow inflation, but he notes there are other contributing factors to high prices.
Russia’s invasion of Ukraine and tight oil and gas supplies are both influencing high prices globally and rising interest rates in Canada would have barely any impact on either of those factors, Roach said.
Because of that, we could see higher prices continuing for months to come.
“Dire straights are starting to become an issue for a lot of families,” he said.
“We’re all feeling it, but some families for sure are feeling it a lot more painfully than others,” Roach said.
With files from The Canadian Press