Food a Contributor as Inflation Remains Elevated in November

Rising food prices remained a significant driver as Canadian inflation continued to run hot in November.

A Statistics Canada report released Wednesday showed the Consumer Price Index (CPI) rose 4.7% on a year-over-year basis in November, matching the increase in October which was the highest since 2003. Although a 43.6% hike in gasoline prices was the biggest headline contributor to the overall increase in November, food was still a major factor, rising 4.4%.

In fact, grocery store prices rose at a faster pace in November (+4.7%) than in October (+3.9%), marking the largest increase since January 2015 when prices went up by 5.4%.

According to StatsCan, prices for fresh or frozen beef increased 15.4% year over year in November, a rise StatsCan blamed on poor crop yields resulting from summer drought on the Prairies that made it more expensive for farmers to feed their livestock, in turn raising prices for consumers.

Meanwhile, fresh vegetable prices increased 2.3% in November, the first yearly increase since February 2021. Prices for other fresh vegetables, including cucumbers, mushrooms and broccoli, were up 6.4% on a year-over-year basis as a result of higher shipping costs and supply chain disruptions.

Last week, Canada’s Food Price Report estimated Canadian families will pay $966 more for food in 2022 than they did in 2021, the result of the ongoing effects of the pandemic on the food supply chain and higher commodity prices. The expected increase in grocery bills is based on the forecast that food prices will increase by 5 to 7% overall, which is the largest predicted increase in the 12 years of the report.