Economist says shelter costs driving inflation, urges BoC to focus on different metrics

One economist says the Bank of Canada should change the way it looks at inflation, highlighting the central bank's current inflationary issues are more of a housing problem.

James Orlando, director and senior economist at TD Economics, said in a report Tuesday that more than half of Canada’s total inflation comes from shelter inflation and has become the “single biggest factor” standing in the way of the central bank achieving its two per cent inflation target. 

“Mortgage interest costs are rising at the fastest pace ever, while rents have soared alongside low vacancies,” Orlando said in the report. 

“This has shelter inflation running at 6.2 per cent year-on-year. Given its huge 30 per cent weighting within the CPI (consumer price index) basket, this component alone has accounted for more than half of overall Canadian inflation.”