Food prices post first annual drop since 2000

Food prices in October posted their first year-over-year decline in nearly 17 years as the annual pace ofinflation crept higher.

OTTAWA — Food prices in October posted their first year-over-year decline in nearly 17 years as the annual pace of inflation crept higher.

Bank of Montreal chief economist Doug Porter said the story on food prices is a reversal from the start of the year.

“That’s the main reason why inflation is still quite restrained at this point,” Porter said.

Statistics Canada said Friday the consumer price index in October was up 1.5 per cent compared with a year ago, in line with the expectations of economists.

The result compared with a 1.3 per cent increase in September.

However, food prices posted their first year-over-year drop since January 2000 as they fell 0.7 per cent in October.

Prices for food purchased from stores recorded their largest decline since July 1992 as they fell 2.1 per cent. The prices for food purchased from restaurants gained 2.6 per cent.

Porter said a more stable Canadian dollar has helped food prices as well as bumper crops in the U.S. that have helped bring down the cost of raw ingredients.

“There’s also of course intense competition among the grocers and some of the big box firms that are trying to sell groceries as well and so we’re in the middle of a little bit of a price war as well,” Porter said.

Earlier this week, Galen G. Weston, executive chairman and president of Loblaw Companies Ltd., said his company saw the grocery market shift from an inflationary environment to a deflationary one in its most recent quarter.

Weston told a conference call to discuss Loblaw’s financial results that the company cut prices to help draw customers back.

Statistics Canada said Friday that prices were up in six of the eight major components with the transportation and shelter sectors contributing the most to the year-over-year increase, offset in part by lower food prices.

The transportation index gained 3.0 per cent compared with a year ago, due to gasoline prices, which posted a 2.5 per cent increase.

Statistics Canada said the shelter index posted its largest increase since January 2015 as it rose 1.9 per cent compared with a year ago.

CIBC economist Nick Exarhos noted that gasoline prices were up 2.5 per cent compared with a year ago.

“Gasoline prices were a drag on headline inflation for most of the past two years, but have finally turned positive,” he wrote in a note to clients.

Excluding gasoline, the consumer price index was up 1.4 per cent compared with a year ago, after posting a 1.5 per cent increase in September.

However, Exarhos said a soft trend in core inflation means the Bank of Canada’s dovish tone is not expected to change.

“Although firmer energy prices going forward should continue to push headline inflation higher, underlying trends will remain muted as the output gap continues to weigh,” Exarhos wrote.

The Bank of Canada’s core index, which excludes some of the most volatile items, increased 1.7 per cent compared with a year ago.

Economists had expected the core rate to be 1.8 per cent.

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

Just Posted

Asymptomatic testing will now be available for "priority groups" who are most likely to spread the COVID-19 virus to vulnerable or at-risk populations. File photo by THE CANADIAN PRESS
Alberta identifies 1,183 new COVID-19 cases on Sunday

50.5% of all active cases are variants of concern

Whistle Stop Cafe owner Christopher Scott and his sister Melodie pose for a photo at the Mirror restaurant. (File photo by Advocate staff)
Alberta Health Services delivers ‘closure order’ to Mirror restaurant

Alberta Health Services says it has delivered a closure order to a… Continue reading

Flags bearers hold the Canadian flag high during the Flags of Remembrance ceremony in Sylvan Lake in this October file photo. (Photo by Sean McIntosh/Advocate staff)
New project to pay tribute to Canadians killed in Afghanistan

Flags of Remembrance scheduled for Sept. 11

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a clinic in Toronto on Thursday, January 7, 2021. THE CANADIAN PRESS/Nathan Denette
Alberta vaccine rollout expanding to front-line health-care workers

More than 240,000 eligible health-care workers can begin booking vaccine appointments starting… Continue reading

File photo
Security and police block the entrance to GraceLife Church as a fence goes up around it near Edmonton on Wednesday April 7, 2021. The Alberta government has closed down and fenced off a church that has been charged with refusing to follow COVID-19 health rules. Alberta Health Services, in a statement, says GraceLife church will remain closed until it shows it will comply with public-health measures meant to contain the spread of the novel coronavirus. THE CANADIAN PRESS/Jason Franson
Hundreds gather to support Alberta church shut down for ignoring COVID-19 orders

SPRUCE GROVE, Alta. — Hundreds of people are gathered outside an Alberta… Continue reading

Members of the Canadian Armed Forces march during the Calgary Stampede parade in Calgary, Friday, July 8, 2016. The Canadian Armed Forces is developing contingency plans to keep COVID-19 from affecting its ability to defend the country and continue its missions overseas amid concerns potential adversaries could try to take advantage of the crisis. THE CANADIAN PRESS/Jeff McIntosh
Canadian special forces supported major Iraqi military assault on ISIL last month

OTTAWA — Some Canadian soldiers supported a major military offensive last month… Continue reading

A woman pays her repects at a roadblock in Portapique, N.S. on Wednesday, April 22, 2020. The joint public inquiry in response to the April mass shooting in Nova Scotia has announced a mandate that includes a probe of the RCMP response as well as the role of gender-based violence in the tragedy. THE CANADIAN PRESS/Andrew Vaughan
Creating permanent memorial to Nova Scotia mass shooting victims a delicate task

PORTAPIQUE, N.S. — Creating a memorial for those killed in Nova Scotia’s… Continue reading

Conservative leader Erin O'Toole holds a press conference on Parliament Hill in Ottawa on Tuesday, April 6, 2020. Top Tory leaders of past and present will speak with supporters today about what a conservative economic recovery from COVID-19 could look like. THE CANADIAN PRESS/Sean Kilpatrick
Erin O’Toole says ‘I didn’t hide who I was’ running for Conservative leader

OTTAWA — Erin O’Toole assured Conservative supporters that he never hid who… Continue reading

Calgary Flames' Johnny Gaudreau, second from left, celebrates his goal with teammates, from left to right, Matthew Tkachuk, Noah Hanifin and Rasmus Andersson, of Sweden, during second period NHL hockey action against the Edmonton Oilers, in Calgary, Alta., Saturday, April 10, 2021. THE CANADIAN PRESS/Larry MacDougal
Jacob Markstrom earns shutout as Flames blank Oilers 5-0 in Battle of Alberta

CALGARY — It took Sean Monahan breaking out of his goal-scoring slump… Continue reading

B.C. Premier John Horgan responds to questions during a postelection news conference in Vancouver, on Sunday, October 25, 2020. British Columbia's opposition Liberals and Greens acknowledge the COVID-19 pandemic has presented huge challenges for Horgan's government, but they say Monday's throne speech must outline a coherent plan for the province's economic, health, social and environmental future. THE CANADIAN PRESS/Darryl Dyck
Horgan’s NDP to bring in throne speech in B.C., Opposition wants coherent plan

VICTORIA — British Columbia’s opposition parties acknowledge the COVID-19 pandemic has presented… Continue reading

A grizzly bear walks on a treadmill as Dr. Charles Robbins, right, offers treats as rewards at Washington State University's Bear Research, Education, and Conservation Center in this undated handout photo. Grizzly bears seem to favour gently sloping or flat trails like those commonly used by people, which can affect land management practices in wild areas, says an expert who has written a paper on their travel patterns. THE CANADIAN PRESS/HO, Anthony Carnahan *MANDATORY CREDIT*
Grizzly bears prefer walking on gentle slopes at a leisurely pace like humans: study

VANCOUVER — Grizzly bears seem to favour gently sloping or flat trails… Continue reading

FILE - In this July 27, 2020, file photo, nurse Kathe Olmstead prepares a shot that is part of a possible COVID-19 vaccine, developed by the National Institutes of Health and Moderna Inc., in Binghamton, N.Y. Moderna said Monday, Nov. 16, 2020, its COVID-19 shot provides strong protection against the coronavirus that's surging in the U.S. and around the world. (AP Photo/Hans Pennink, File)
The COVID-19 wasteland: searching for clues to the pandemic in the sewers

OTTAWA — When Ottawa Public Health officials are trying to decide whether… Continue reading

Most Read