Some economists say inflation may be peaking as rate tops 8 per cent

Canada’s inflation rate for June hit a 40-year-high and Calgary businesses are grappling with increased costs as a result.

“If the food costs don’t get you the labor cost does. If labor doesn’t get you the energy costs will,” said Jordan Sorrenti, owner of Paddy’s Barbecue and Brewery in southeast Calgary.

According to Statistics Canada the largest cost increases for food items was for edible fats and oils, which rose by 28.8 per cent from 2021 to the same time this year.

Sorrenti said last year he spent $22 for 16 liters of cooking oil that he uses in most of his menu items and to operate the fryer while this year he spends roughly $44 on the same quantity.

He said there’s only so much he can pass onto his customers.

“They can buy a sandwich here for $14 or $15. Some places it’s upwards of $20 or more, then add a side dish. Buying lunch now is like going out for dinner.”

The high prices are keeping some of his patrons away except for special occasions.

“You just don’t eat out as much,” said Megan Coyle, on Wednesday afternoon on the Paddy’s patio, where she was out for a meal with work friends.

FOOD BANK DEMAND RISES

Rising costs are also sending more people to the Calgary Food Bank.

“We are up 26 per cent year over year. The times are definitely affecting us we are seeing more people needing to access the food bank,” said spokesperson Betty Jo Kaiser.

Canada’s inflation rate has hit 8.1 per cent showing a steady climb in recent months. It hasn’t been that high in 40 years.

Food prices meanwhile are up 8.8 per cent from 2021.

Most experts agree high inflation will be continue for at least a little while longer.

“The Bank of Canada is indicating that this is going to persist for the next couple of months, and then start to slow and they expect three per cent inflation by the end of the year,” said Robert Gerrie, a wealth/investment advisor PKAG to CTV News.

An Alberta economist predicts that it will take until 2023 to feel back to normal, but the province is in a unique position because of the current boom in the energy sector.

“That helps offset some of that. Alberta’s overall economic growth will probably outpace most of the rest of the country. We’re still going to feel the effects of inflation and interest rates, but we’ll be a little bit better off than other parts of the country,” said Rob Roach, chief deputy economist with ATB Financial.

NDP REACTS

Alberta’s NDP opposition says elected officials should head back to the legislature before the scheduled date to reconvene in October, to tackle inflation.

“If (the United Conservative party government is) serious about it, they will join our call to come back to the legislature and actually make the changes that will ensure that Alberta families have a little bit more in their pockets at the end of each month ,” said Alberta NDP leader Rachel Notley.

Alberta Opposition Leader Rachel Notley criticized the province’s school re-entry plan Thursday, labeling it ‘reckless’.

“This issue can’t wait until October or November or whenever this current chapter of the UCP internal drama gets resolved. This issue has to be addressed now. Families need help,” she said.

A news release from Alberta Finance Minister Jason Nixon said the province is already tackling affordability concerns with the gas tax holiday introduced in April and extended through September, and the energy bill rebate that begins this month.

“Life is already more affordable in Alberta, and the government is providing $2.3 billion in additional measures to bring down costs on daily necessities like fuel and utilities and supporting those who need it most,” said the release sent Wednesday.

It added, “We already have the lowest overall taxes among provinces while our major cities have some of the lowest Canadian housing prices and rental costs among urban centres.”

Nixon also called on more action from the federal government to assist with inflation-related affordability concerns by calling for a pause of the collection of both the federal carbon tax and the federal fuel tax.

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