Waterloo region residents react to Canada’s inflation rate dropping

New numbers from Statistics Canada show the country’s inflation rate dropped to a rate we haven’t seen in more than two years, but local shoppers are still seeing high prices at grocery stores.

Annual inflation tumbled to 2.8 per cent in June, Statistics Canada reported Tuesday.

Lower gasoline prices compared with last year led the slowdown, but Canadians continue to pay substantially higher prices for groceries, as prices rose 9.1 per cent year-over-year, slightly faster than in May.

LOCAL SHOPPERS REACT

George Odisho, from Breslau, said shopping for a family of six isn’t easy these days.

“Two years ago [I paid] maybe $250. Right now – it’s double. About $500 a week,” Odisho said at a grocery store parking lot in Kitchener.

One father of six from Kitchener said it’s a struggle to pay the bills.

“Completely different from two or three years ago. We have to work double what we worked before,” the man said.

Some shoppers said they have been forced to find ways to try to save money when at the grocery store.

“I tend to make larger meals and freeze them,” a Kitchener woman told CTV News.

She said she heard about Canada’s inflation rate dropping but said it hasn’t filled her with the hopes that grocery prices will be impacted anytime soon.

“I’ll believe it when I see it,” she said.

Another shopper from Kitchener said he only shops the sales.

“Instead of shopping in one market, we go to multiple markets to shop where the prices are low,” he said while shopping with one of his kids.

FOOD EXPERTS WEIGH IN

Sylvain Charlebois from the Agri-Food Analytics Lab said fruit and meat products are the main reason why food inflation keeps rising.

But he said it’s not all bad news. He said the numbers are headed in the right direction, even if it may be going at a slow pace.

“From May to June food inflation actually dropped by .1 per cent. It’s not much, but we need all the help we can get right now.” Charlebois said.

MORTGAGE RATES CLIMB

Mortgage interest costs were up more than 30 per cent from June 2022, when the Bank of Canada's key interest rate was 1.5 per cent compared with 4.75 per cent for most of June 2023. With July's quarter-percentage-point rate hike, the central bank rate is now at five per cent.

DEBT CONSULTANT OFFERS ADVICE

Paul Ihnatiuk, the vice-president of BDO, a public accounting company with a location in Kitchener-Waterloo, said the first thing residents should do is make sure you keep a budget.

“We know that half of Canadians don’t have a budget. If you don’t have a budget, you really don’t know where your moneys going to, and you really don’t know where to trim expenses in times of an emergency,” Ihnatiuk said.

He said after that – look at your debt and see if you’re managing it properly. He suggests going to an expert to help you look for solutions.

NUMBERS TRENDING DOWNWARDS

The report also found that people paid 14.7 per cent less for cellular services than they did a year ago due to lower prices for data plans and sales promotions.

The annual inflation rate was 3.4 per cent in May. The last time it fell below three per cent was in March 2021.

The central bank said it expects inflation to hover around 3 per cent over the next year, before steadily declining to two per cent by mid-2025.

The Bank of Canada's next rate decision is slated for September.

BNN Bloomberg's Amber Kanwar said that means another looming rate hike is likely still on the table.

“Because of those stubborn numbers on a core basis,” Kanwar said. “You can ask the question, what is a rate hike going to do to food inflation? Probably not a whole lot. However, it is the bank's mandate to try and bring that inflation number down to its 2 per cent target so it has to do what it can to impact other areas of the market that might be running a little bit hot.”

With files from The Canadian Press