By John Q. Hosedrinker 
Eastern Canadian provinces are experiencing a surge in gas prices, prompting drivers to queue at gas stations in anticipation of further increases. This price hike is impacting consumers across the region, causing a scramble to fill tanks before costs escalate. The situation is evident in areas like Mississauga, Ontario, where long lines of vehicles were observed at gas stations on Tuesday, February 13, 2024. These rising prices are creating a noticeable financial strain for residents.
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Inflation jumps to 2.4% in September thanks to gas, grocery costs. Well, alright, so we’re talking about Canada here, and the headline is that inflation hit 2.4% in September. That’s the big news, and it’s driven primarily by the rising costs of two of life’s essentials: gasoline and groceries. It’s worth noting upfront that many countries, like Canada and the United States, aim for around a 2% inflation rate. So, at 2.4%, we’re not talking about runaway inflation, but it’s certainly a noticeable tick upwards.
Considering this, it’s natural to wonder what’s causing this particular jump. The most immediate culprits are those aforementioned costs. Gas prices, which are often highly visible and fluctuate frequently, have clearly played a role. On top of that, grocery prices are also steadily climbing.
When we consider the broader picture, it’s essential to realize that Canada isn’t operating in a vacuum. A lot of the food available in Canada is sourced from the United States. Also, a lot of Canadian oil is processed in the US and then imported back as gasoline. This means that factors impacting prices in the US, like tariffs on ingredients from other countries, or the price of Canadian oil, can have a direct effect on Canadian consumers.
As an interesting point, some may question why Canada’s inflation could be elevated. Unlike the US, Canada might not have the same issues with tariffs that the US faces. It’s also worth keeping in mind that there is always inflation. An inflation rate of zero is actually uncommon. The goal is to keep things stable.
In addition to this, companies have a tendency to pass on costs. If a company experiences an increase in its costs, it’s very easy to pass them on to consumers. They often may even tack on a bit of extra profit for themselves. So it’s not always a straightforward cause-and-effect relationship, with a lot of different factors impacting the final price.
Moreover, it’s worth bearing in mind that the current 2.4% figure is a snapshot in time, and other countries are experiencing similar pressures. Recent data indicates that other nations are also experiencing upward inflation. Japan’s core inflation re-accelerated in September, for instance, and Argentina is forecasted to see inflation accelerate during the same month. Even with a lower inflation value, France’s inflation in September was confirmed to be 1.1% year-on-year. These things are all connected.
It’s also worth keeping in mind that central banks, across multiple countries, will often print too much currency. It’s a contributing factor to the bigger picture.
Looking at this, it is fair to point out that real estate is a significant part of the Canadian economy. The central bank will raise rates if they see the numbers rising, and that’s what a lot of people are paying close attention to.
There is always the possibility of regional differences. This is especially relevant to grocery prices, which may see seasonal fluctuations.
At any rate, this isn’t necessarily a cause for panic. Inflation has its ebbs and flows, and while 2.4% might be above the ideal target, it’s not a dramatic spike. It’s a bump that’s clearly influenced by what we pay at the pump and in the grocery aisles.