Toronto 
Statistics Canada today released the Consumer Price Index report for July 2022, and the annual rate of inflation has fallen to 7.6 per cent.
This is lower than June’s inflation rate of 8.1 per cent, a 39-year high.
As per the report, deceleration was due to a decline in gasoline prices. Excluding gasoline, prices rose 0.1% compared to June, and 6.6% year over year in July.
Statistics Canada says prices increased for natural gas, groceries, flights, restaurant meals and hotel stays contributing to the seventh consecutive monthly increase of 0.1% in July. The CPI was also up 0.3% on a seasonally adjusted basis. The cost of flights and travel tours rose 25.5% and 24.8% respectively in July compared to June.
Statistics Canada
Natural gas prices in Canada rose 42.6% last month compared to July of last year and this was largely due to the price increase in Ontario. Ontario Energy Board increased the rates in July. While gas prices increased in Ontario, Albertans paid 18.0% less for electricity in July on a year-over-year basis. as a result of a provincial rebate.
As Bank of Canada increased interest rates on July 13th by 1 per cent, the mortgage interest cost index increased by +1.7%. Statistics Canada says the increase in higher mortgage rates could increase rental demand in the coming months. Rental prices increased 4.9% in July on a yearly basis, following a 4.3% increase in June. The high growth in rent index was largely driven by a 6.4% increase in Ontario and 3.4% in Alberta.
Among the provinces, inflation reduced in all 8 provinces in July except in Saskatchewan and British Columbia.
Statistics Canada
PEI experienced the highest inflation at 9,5%. Newfoundland and Labrador and Quebec have the lowest inflation at 6.9 and 7.3 percent respectively.
Statistics Canada says while hourly wages increased by 5.2% year-over-year and consumer inflation continued to exceed wage growth, the gap in purchasing power was smaller in July than in June due to the deceleration of CPI to 7.6% from the high of 8.1%.
The Bank of Canada is expected to announce another increase in interest rates on September 7th as the bank says that interest rates will need to rise further to reduce inflation.
