OTTAWA – Inflation has eroded purchasing power for many Canadians, but the experience with rapidly rising prices has been far from uniform. While the inflation rate shows how quickly prices are rising, other factors like income and consumption patterns can make it harder or easier for people to cope.
Here’s a look at how high inflation is right now, who’s feeling the pinch, and when Canadians can expect inflation to come down. HOW HIGH IS INFLATION?
After reaching 8.1 percent in the summer, Canada’s annual inflation rate has slowed noticeably in recent months. In December, the annual inflation rate was 6.3 percent.
Although that’s still much higher than the Bank of Canada’s two percent target, recent monthly trends suggest inflation is heading closer to the target. But even as inflation slows, food prices in particular have been a pain point for many Canadians. In December, grocery prices were 11 percent higher than they were a year ago.
HAVE WAGES KEPT UP WITH THE COST OF LIVING?
Wages are rising but have not kept up with the rate of inflation. In December, average hourly wages were up 5.1 percent compared with a year ago. Brendon Bernard, a senior economist with hiring website Indeed, says Canadians on average have seen their real wages (amount earned after factoring in inflation) fall by about one percent during that time period. But some have seen their wages go up more than others, making it easier for those who have received a raise to cope with the rising cost of living. Workers can’t always negotiate their pay to reflect the rise in the cost of living. Unionized workers, for example, negotiate contracts on fixed schedules.
“It will take potentially quite a bit of time for the current spike in inflation to be compensated for with increased wages for individuals,” Tombe said.
WHO’S BEEN HIT THE HARDEST?
Though most Canadians have probably experienced sticker shock at the grocery store or elsewhere, not everyone is equally strained… Source: ctvnews.ca
Friday, May 1, 2026
