Your Business News
Canada’s inflation hits 6.7% as the global oil shock sets in
April 20, 2022
Authored by RSM Canada LLP
Kirby W. Houle, CPA, CA shared this article
REAL ECONOMY BLOG | April 20, 2022
Inflation in Canada hit 6.7% in March, up from 5.7% in February and the largest year-over-year increase since January 1991 as supply chain disruptions, the war in Ukraine and a reopening economy all had an effect.
Excluding gasoline, inflation rose 5.5% from a year ago, the fastest since the index of inflation for all items excluding gasoline was introduced in 1999, according to government data released Wednesday.
The effects of the war in Ukraine and the oil supply shock are now being felt across the economy, with gasoline surging by 11.8% from February. Higher gasoline prices also drove up transportation costs, which helped push up prices of all other consumer goods. Food prices, for example, went up 8.7% on a year-over-year basis.
Prices of durable goods were not far behind either. Car prices rose by 7% on a yearly basis, partly because of the availability of 2022 model year vehicles, which are higher priced, and partly because of the continued shortage of semiconductor chips.
Similarly, the global supply chain disruptions continued in the furniture sphere, as those prices rose 13.7% on a yearly basis.
Although gasoline prices have since stabilized, the future remains uncertain. If conditions of the war worsen, and a Russian oil ban occurs across Europe, a remote but distinct possibility, we can count on gasoline prices rising more.
Food prices in particular will stay high as the war is causing global shortages of grains, cooking oil and fertilizer and threatening global hunger crises.
As public health measures ease across Canada and the world, the tourism and entertainment sectors are having an influx of customers not seen since 2019, before the pandemic.
Businesses are struggling to hire staff and meet the pent-up demand. As consumers are eager to travel and fill arenas and venues, the prices of accommodation, restaurant dining and entertainment will continue to increase this summer.
Call us at 1 855 363 3526 or fill out the form below and we'll contact you to discuss your specific situation.
This article was written by Tu Nguyen and originally appeared on 2022-04-20 RSM Canada, and is available online at https://realeconomy.rsmus.com/canadas-inflation-hits-6-7-as-the-global-oil-shock-sets-in/.
RSM Canada Alliance provides its members with access to resources of RSM Canada Operations ULC, RSM Canada LLP and certain of their affiliates (“RSM Canada”). RSM Canada Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM Canada. RSM Canada LLP is the Canadian member firm of RSM International, a global network of independent audit, tax and consulting firms. Members of RSM Canada Alliance have access to RSM International resources through RSM Canada but are not member firms of RSM International. Visit rsmcanada.com/aboutus for more information regarding RSM Canada and RSM International. The RSM trademark is used under license by RSM Canada. RSM Canada Alliance products and services are proprietary to RSM Canada.
FCR a proud member of RSM Canada Alliance, a premier affiliation of independent accounting and consulting firms across North America. RSM Canada Alliance provides our firm with access to resources of RSM, the leading provider of audit, tax and consulting services focused on the middle market. RSM Canada LLP is a licensed CPA firm and the Canadian member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries.
Our membership in RSM Canada Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources.
For more information on how FCR can assist you, please call us at 1 855 363 3526