Statistics Canada’s inflation figures show that the price of fresh vegetables just saw the largest spike in almost three years.
Canada’s inflation rate inched higher to 2.4 per cent in March, compared to 1.8 per cent in February, led largely by fuel costs amidst the Iran war and the closure of the Strait of Hormuz.
Excluding gasoline, though, the pace of inflation slowed to 2.2 per cent in March, compared to 2.4 per cent in February.
Food prices, however, soared in March. The prices of food purchased from stores rose by 4.4 per cent in March, compared to 4.1 per cent in February.
Fresh vegetables saw the steepest increase, with prices for fresh vegetables rising 7.8 per cent in March. This was a significant increase compared to February, which barely saw any increase in the price of fresh vegetables (0.5 per cent).
This is the largest increase in the prices of fresh vegetables since August 2023, when they grew by 8.7 per cent.
Cucumbers, peppers and celery all had notable price growth in March, “due in part to tighter supplies related to adverse growing conditions in producing countries,” Statistics Canada said.
There was a slight silver lining for Canadians eating out at restaurants in March. While the price of food purchased at restaurants rose by 3.2 per cent in March, it was a much slower pace of growth compared to February, when it rose by 7.8 per cent.
Get breaking National news
But higher energy prices squeezed Canadians in March. In February, energy prices decreased by 9.3 per cent, but in March they rose by 3.9 per cent.
Higher gas prices were the “primary driver” of inflation in Canada, with consumers paying 5.9 per cent more for gas in March than they did in the same month last year. Compared to February, gas prices rose 21.2 per cent.
However, energy prices were sheltered by lower prices for natural gas (18.1 per cent decrease) since Canada’s natural gas prices “are largely dependent on North American supply and therefore more insulated from global price changes,” Statistics Canada said.
Fuel costs and food prices are interlinked, said retail analyst Bruce Winder.
“The conflict in the Middle East is causing real-time inflation on transportation costs for food,” Winder said.
While typically, Canadians could expect food prices to go down with the start of the Canadian growing season, a spike in global fertilizer prices is causing prices to stay high, he added.
“The global fertilizer market is upended as well with the Middle East conflict,” he added.
Despite higher gas prices, inflation figures were not as bad as some economists feared.
“It could have been worse,” said BMO chief economist Doug Porter in a note on Monday.
“The older, more traditional, measures of core—excluding food & energy—are still hovering right around the 2% target,” he added.
The Bank of Canada is expected to leave its benchmark interest rate unchanged later this month, said TD Bank senior economist Leslie Preston.
The shock that Canadians have been feeling at the pumps has now started showing up in inflation data, said Canadian Chamber of Commerce principal economist Andew DiCapua.
“The longer the conflict in Iran and the closure of the Strait of Hormuz continue, the more it will test Canadians’ patience — and the higher the risk of pushing already elevated inflation expectations even further,” he added.
Carney can’t get anything done. Just excuses and nothing more.
Canada is a major producer of fertilizers. The observation that fertilizers from the middle east is causing problems with our food prices is bogus. Might as well blame climate change (as usual).
Well this explains why Carneys airplane trip meals are so costly?. he’s traveling the world so much he should be hitting some farmers markets to bring his share of costs down.
Highest spike in 3 years …. Thank you Carney and the Elbozos crowd
Looks like a lot of new gardens coming this summer.
Carney will just claim food prices are down just like he claimed he didnt raise the deficit
Another fail by Carney.
I guess people will be eating less fresh vegetables. Didn’t Carney say judge him on food prices well guess what Carney has failed miserably on that issue.