Statistics Canada’s offices at Tunny’s Pasture in Ottawa are shown on March 8, 2019. THE CANADIAN PRESS/Justin Tang

Statistics Canada’s offices at Tunny’s Pasture in Ottawa are shown on March 8, 2019. THE CANADIAN PRESS/Justin Tang

Annual pace of inflation climbs to 1.0 per cent in November, Statistics Canada says

Rent prices rose 1.5 per cent compared to a year earlier

OTTAWA — The country’s annual inflation rate rose to one per cent in November, driven by a rise in prices for homes, rent and goods around the house.

Statistics Canada said Wednesday the increase compared with a year-over-year increase of 0.7 per cent in October and 0.5 per cent in September.

Economists had expected a year-over-year increase for November of 0.8 per cent, according to financial data firm Refinitiv.

Shelter prices rose 1.9 per cent, contributing the most to the overall increase. Rent prices rose 1.5 per cent in November compared to one year earlier, an increase from the one per cent recorded in October.

Prices for furniture were up 2.8 per cent, and appliances by 2.9 per cent, remaining above pre-pandemic levels.

Statistics Canada said the focus on spending around houses is likely due to the pandemic itself: Physical distancing rules and workers asked to stay home “may have prompted increased spending on big-ticket items.”

Also driving the increase is a collision of pent-up demand, a glut of savings, historically low interest rates and homebuyers interested in more single-family homes than condominiums.

Throw into the mix higher building material costs and low inventories, and Statistics Canada said there is a perfect mixture for rising prices for new housing.

Mortgage rates have been driven down by the Bank of Canada’s key policy rate — currently at 0.25 per cent — which is as low as the central bank says it can go.

The Bank of Canada has said the rate will stay there until inflation is back at two per cent, which the central bank said last week it doesn’t expect to happen until some time in 2023.

“I have no doubt that that is a factor supporting the housing market,” Bank of Canada governor Tiff Macklem said Tuesday when asked by a reporter about the housing market.

“Frankly, that’s part of the way monetary policy works. That’s part of the way it puts stimulus in the in the system by encouraging spending particularly on things that are often bought with credit.”

In November, the average of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures and closely tracked by the Bank of Canada, was about 1.7 per cent.

Gasoline prices in November fell 11.9 per cent year-over-year as the pandemic continued to weigh on demand.

Statistics Canada says the consumer price index excluding gasoline in November was up 1.3 per cent compared with a year ago.

Rising gasoline prices expected next year will likely push headline inflation above the central bank’s two per cent target next year, but the overshoot could be temporary, says CIBC senior economist Royce Mendes.

He wrote in a note that the Bank of Canada will likely look through it and leave the policy rate on hold until slack in the economy is absorbed.

This report by The Canadian Press was first published Dec. 16, 2020.


Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Many students and staff at St. Joseph High School are in COVID-19 quarantine. (File photo by JeffAdvocate staff)
St. Joseph High School students return to at-home learning today

Majority of students under COVID-19 quarantine

President Donald Trump speaks with reporters as he walks to board Marine One on the South Lawn of the White House, Wednesday, Jan. 20, 2021, in Washington. Trump is en route to his Mar-a-Lago Florida Resort. (AP Photo/Alex Brandon)
Supreme Court ends Trump emoluments lawsuits

Outcome leaves no judicial opinions on the books

Health-care workers wait in line at a UHN COVID-19 vaccine clinic in Toronto on January 7, 2021. THE CANADIAN PRESS/Nathan Denette
Military to support vaccination efforts in northern Ontario Indigenous communities

Canadian Armed Forces to support vaccine efforts in 32 communities of the Nishnawbe Aski Nation

People skate on a lake in a city park in Montreal, Sunday, January 10, 2021. THE CANADIAN PRESS/Graham Hughes
The end of hugs: How COVID-19 has changed daily life a year after Canada’s first case

By March a series of measures fundamentally altered how many Canadians live

Terrance Josephson of the Princeton Posse, at left, and Tyson Conroy of the Summerland Steam clash during a Junior B hockey game at the Summerland Arena in the early spring of 2020. (John Arendt - Summerland Review)
QUIZ: How much do you know about hockey?

Test your knowledge of Canada’s national winter sport

A Shell logo is seen at a petrol station in London on January 20, 2016. THE CANADIAN PRESS/AP, Kirsty Wigglesworth
Shell buys European electric car charging firm ubitricity

Experts say easier access to charging facilities key to successful rollout of electric vehicles

FILE— In this Feb. 23, 2019, file photo, Vashti Cunningham poses for photographers after winning the women’s high jump final at the USA Track & Field Indoor Championships in New York. Cunningham is one of the athletes who will be competing in the American Track League, which opens a four-week-long series on Sunday, Jan. 24, 2021 in an indoor setting at the University of Arkansas. (AP Photo/Julio Cortez. File)
Back on track: Competing, not cash, lures big names to meet

American Track League begins a four-week indoor series at the University of Arkansas

Eugene Levy, left, and his son Dan Levy accept the Best Comedy Series Award for ‘“Schitt’s Creek” at the Canadian Screen Awards in Toronto on Sunday, March 13, 2016. THE CANADIAN PRESS/Peter Power
Dan Levy to make ‘Saturday Night Live’ hosting debut on Feb. 6

‘Schitt’s Creek’ co-creator to host show

Toronto Maple Leafs' Alexander Kerfoot, centre, tries to get the puck past Calgary Flames goalie Jacob Markstrom, right, as Noah Hanifin looks on during first period NHL hockey action in Calgary, Sunday, Jan. 24, 2021.THE CANADIAN PRESS/Jeff McIntosh
Morgan Reilly’s three assists lifts Maple Leafs to 3-2 win over Flames

Leafs 3 Flames 2 CALGARY — Morgan Reilly’s three assists helped the… Continue reading

Green Bay Packers' Adrian Amos (31) reacts after intercepting a pass intended for Tampa Bay Buccaneers' Mike Evans during the second half of the NFC championship NFL football game in Green Bay, Wis., Sunday, Jan. 24, 2021. (AP Photo/Jeffrey Phelps)
Road warriors: Bucs win 31-26 at Green Bay, reach Super Bowl

GREEN BAY, Wis. — Tom Brady and the Tampa Bay Buccaneers’ road… Continue reading

People arrive to be tested for COVID-19 at a clinic in Montreal, Sunday, January 24, 2021, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
Too soon to know if Canada’s COVID-19 case decline will continue, Tam says

MONTREAL — It’s still too soon to know whether the recent downward… Continue reading

Most Read