Canadians will need to tighten their wallets a bit further as inflation continues to rise.
According to Market Watch, inflation in August reached its highest point in the past four months, with Canadians facing increased costs for housing and at the gas pumps.
Statistics Canada reported that the consumer price index (CPI) rose to 4% in August compared to the same month last year. This represents a consecutive increase from 3.3% in the previous month.
The Bank of Canada anticipates more pain for taxpayers in the immediate future owing to a recent jump in energy prices.
According to StatsCan, gas prices rose strongly on a monthly basis, contributing to the year-over-year increase for August, thanks mainly to higher crude oil costs following production cuts by major oil-producing countries.
Among the provinces, energy prices rose the most in Alberta, increasing 13.3% year over year in August, following a 7.7% decline in July. Along with gasoline, natural gas and electricity prices contributed to the acceleration amid high summer demand.
Excluding energy, the CPI rose 4.1% in August after a meagre 0.4% jump in July.
For groceries, residents continue to pay through the roof. Though the pace of growth slowed to 6.9% annually from 8.5% in July, consumers paid more for meat and various fruits and vegetables than before.
Excluding volatile food and energy prices, Canada's CPI rose 3.6% in August from a year earlier, after a 3.4% gain in July, reported Market Watch.
Of notable concern, rent and mortgage rates continue to rise astronomically month-over-month.
Shelter prices rose 6.0% yearly in August after increasing 5.1% in July. The rent index experienced even greater hikes in August at 6.5% year over year, following a 5.5% gain in July.
As the Bank of Canada ponders its next policy decision for October, the central bank will consider inflation and recent interest rate hikes when gauging how to proceed.
The bank earlier this month held its benchmark interest rate steady at 5% following back-to-back quarter-point increases in June and July.
They attributed the "excess demand" in the retail sector and the country's booming population for the hikes, contributing to job growth, spending and housing demand.
Canada's population surpassed 40 million in June and could hit 50 million in two decades. By 2041, two in five Canadians would be foreigners.
In February, CIBC CEO Victor Dodig said Canada could be on the precipice of an unprecedented "social crisis" if Ottawa fails to build more housing to accommodate new immigrants.
"New Canadians want to establish a life here and need a roof over their heads. We need to get that policy right and not wave the flag saying, isn't it great that everyone wants to come to Canada," he added.
While the economy has shown signs of slowing down, the Bank of Canada expressed concerns with the underlying causes of inflation.
According to Market Watch, three-month core inflation rates have fluctuated between 3.5% to 4% for almost a year, despite the bank's efforts to drive it down to 2%.
In January, the central bank Governor, Tiff Macklem, predicted zero growth for much of 2023.
"The economy is slowing, and we expect it will continue to slow. We expect growth through the next two, three quarters to be close to zero," he said.
StatsCan said that real gross domestic product (GDP) decreased 0.2% in June, following a 0.2% increase in May.
"That is an economy that is stalled. It is not going to feel good [for taxpayers]," added Macklem.
At the time, the Bank raised its benchmark interest rate by a quarter point to 4.5% — up considerably from 0.25% in the same period last year.
StatsCan's CPI for last December unveiled grocery prices had soared 9.8% over December 2021, marking the fastest increase since 1981.
Rising energy prices also contributed significantly to high inflation last year, as consumers paid 28.5% more for gasoline in 2022 than in 2021.
The country's annual inflation rate peaked last summer at 8.1% and slowly fell to 6.8% in November.
However, the average annual inflation rate topped a four-decade high at 6.8% — more than double the previous year.