Canada has recorded the largest increase in the inflation rate since January 1991, with the inflation rate rising from 5.7 per cent to 6.7 per cent in a month.
Gasoline, groceries, prices for durable goods, passenger vehicles and furniture all saw an increase in prices.
“There is really no doubt why it happened. Every time you print a lot of money you have inflation,” University of Toronto Economics professor Jack Carr told Humber News.
However, the steady increase in the gas prices throughout the country is not necessarily a consequence of the rising inflation rate.
“Gas prices and inflation are two different things. That may seem strange but gas prices are specifically related to the gasoline market. Even if we did not have any general inflation, you would still have problems with gasoline,” Carr said.
“The gasoline prices depend on the demand and supply,” he said.
“Russia is the major exporter to the extent that we stop Russian oil and gas coming to the West that will affect gasoline prices. Gasoline prices will depend a lot on what happens in the gasoline market itself.”
Prices for groceries also saw the largest yearly increase since March 2009 with Canadians paying 8.7 per cent more in March, up from 7.4 per cent increase in February.
However, Carr says that there are external factors that might be responsible for the increase.
The war in Ukraine, a country that is a major producer of wheat and certain agricultural produce, and the effects of the pandemic on supply chain have also affected the prices.
“Specific prices and specific markets, we will always have a problem. Inflation is all prices going up, the general increase in price. It is affected by the quantity of the money printed,” said Carr.
Still, there were also positive economic signals.
Employment in Canada strengthened with the unemployment rate falling to an all time low, as hourly wages rose by 3.4 per cent.
“Inflation makes us think a lot more carefully about what’s happening to our own income relative to the prices of the things we buy,” said University of Toronto Professor Philip Oreopolous.
“There’s a lot of signs that your income needs to be rising at least by this much higher rate in order for you to be keeping up with what you’re spending in the past,” said Oreopolous.
Even though the Bank of Canada is committed to fighting inflation, it could take some time for the inflation rate to decrease since there are a lot of variables, Carr said.