Canada’s annual inflation slows in February, but is this the dip before the spike?
BNN Bloomberg
Canada’s annual inflation rate slowed in February to 1.8 per cent, but many economists believe the new Statistics Canada data may be the dip before a spike driven by oil prices and the war in Iran.
Since the war began, oil prices have jumped 40 to 50 per cent. A hike that wasn’t captured in StatCan’s February Consumer Price Index (CPI) numbers, given the war didn’t start until the end of February.
Vancouver School of Economics Professor Paul Beaudry expects to see Canada post higher inflation numbers in March.
“Once the gas prices go up, that goes directly into inflation. There’s no way around it,” said Beaudry.
For small businesses that are already experiencing rising prices, especially when it comes to food, the idea of higher inflation and higher gas prices is troubling. Dan Kelly, the president and CEO of the Canadian Federation of Independent Business, says almost every business uses fuel in one way or another.
“This is unwelcome pressure on top of huge amounts of uncertainty that are wafting through the economy,” he said. “Businesses haven’t even recovered from the (COVID-19) pandemic, then we move into a trade war and now we move into rising gas prices. The knots continue and for some businesses, this is a big, big threat.”
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