CPI rose 0.1% in November following a 0.7% gain in October

Inflation in Canada rose 6.8 per cent year over year in November, following a 6.9 per cent increase in October.

Excluding food and energy, prices rose 5.4 per cent on a yearly basis in November, following a gain of 5.3 per cent in October. Slower price growth for gasoline and furniture was partially offset by faster growth in mortgage interest cost and rent.

On a monthly basis, the Consumer Price Index (CPI), which measures inflation rose 0.1 per cent in November following a 0.7 per cent gain in October. On a seasonally adjusted monthly basis, the CPI was up 0.4 per cent.

Gasoline prices fall as food prices went up

On a monthly basis, gasoline prices fell 3.6 per cent in November following a 9.2 per cent increase in October, largely driven by price declines in Western Canada. The reopening of refineries in the western United States contributed to lower prices in British Columbia, Alberta, Saskatchewan and Manitoba.

Year over year, gasoline prices rose 13.7 per cent in November after rising 17.8 per cent in October. Prices for food purchased from stores rose 11.4 per cent year over year in November, following an 11.0 per cent gain in October.

Food inflation remained broad-based, with prices for groceries rising at a faster rate than the all-items CPI every month since December 2021. Canadians saw prices increase at a faster pace in November 2022 for non-alcoholic beverages (+19.4%), fresh fruit (+11.0%) and meat (+6.2%).

Chicken prices rose 9.3 per cent on a year-over-year basis, due partly to reduced global supply, as farmers have culled and quarantined birds infected with avian influenza. Some notable year-over-year price increases were seen for products such as edible fats and oils (+26.0%), coffee and tea (+16.8%), eggs (+16.7%), cereal products (+15.7%) and bakery products (+15.5%).

Shelter prices rise at a faster rate

Prices for shelter (+7.2%) rose at a faster pace year over year in November, mainly due to upward pressure from the mortgage interest cost and rent indexes. Mortgage interest cost continued to rise at a faster rate year over year, up 14.5 per cent in November compared with 11.4 per cent in October, amid the higher interest rate environment.

The increase in November was the largest since February 1983. The rent index rose 5.9 per cent in November on a year-over-year basis following a 4.7 per cent increase in October.

Among other factors, a higher interest rate environment, which may create barriers to homeownership, put upward pressure on the index. Rent prices accelerated the most in Prince Edward Island (+12.6%), British Columbia (+7.2%), Quebec (+5.3%) and Ontario (+7.1%).

Moderating the year-over-year price increase in the shelter component was a slowdown in the growth of the homeowners’ replacement cost index (+5.8%) and other owned accommodation expenses (+3.7%), which includes realtor commission fees. These two indexes reflect a general cooling of the housing market, as growth in both indexes has slowed every month since May 2022.

Slower year-over-year growth in furniture prices

Furniture prices rose 8.1 per cent year over year in November after eight consecutive months of increases above 12 per cent. This was largely the result of a base-year effect resulting from a notable monthly price increase in November 2021 amid higher shipping costs.

Supply chain constraints have eased throughout the second half of 2022, which may also have contributed to the deceleration of furniture prices in November.

Prices for cellular services rise

In November, prices for cellular services rose on a year-over-year basis for the first time in three years. Consumers paid 2.0 per cent more compared with November 2021, when prices fell amid a series of industry-wide price promotions offering reduced prices for phone plans and bonus data. Comparatively, there were fewer promotions offered in November 2022. for the first time since 2019.

Regional highlights

Year over year, prices rose at a faster pace in November compared with October in six provinces. Faster price growth was most visible in Prince Edward Island (+9.7%), Nova Scotia (+8.6%) and New Brunswick (+7.8%), where consumers paid more for fuel oil and other fuels. Fuel oil is more commonly used in these provinces to heat homes.