Canada’s inflation rate rose at its fastest pace in nearly 40 years during the year to May, as the price of almost everything continues to rise rapidly.
Statistics Canada reported on Wednesday that a rise in gasoline prices was a major factor in the rise. The price of gas rose 12 percent in May alone and has risen 48 percent from a year ago.
Food prices were also a major factor in the rise, as grocery bills rose 9.7% last year. Within the food category, the cost of edible fats and oils soared by 30 percent, the fastest increase on record.
The Russian invasion of Ukraine is a major factor in this upswing, as Ukraine is one of the world’s leading suppliers of sunflower oil, and the war has led to a shortage of pantry commodities.
TARGET | How the war in Ukraine is causing a shortage of sunflower oil:
Why the war in Ukraine is causing a significant shortage of sunflower oil
Food researchers say the shortage of sunflower oil caused by the war in Ukraine will only get worse.
Economists had expected the rate to rise from a 30-year high of 6.8 percent in April, but May figures exceeded those expectations.
Canada is not the only country that has faced inflation at its highest level in decades. In the US, the inflation rate is over 8% right now, and new data from the UK shows that the cost of living is up 9% a year.
While Canada’s inflation rate is rising rapidly anyway, Statistics Canada made some changes recently in the way the numbers are tabulated. These changes made the problem of inflation seem even bigger than before.
The data agency updated its inflation basket to include the prices of new and used vehicles in its calculations, rather than as they did before, which was for power. Statscan also adjusted its inflation basket to give more weight to housing costs.
According to data agency calculations, the cost of acquiring a passenger vehicle rose 6.8 percent last year. Although it is lower than the general inflation rate, it was nonetheless one of the main factors contributing to the higher global rise, Statscan said.