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inflation rate in Canada hit 6.8 percent, B.C. small businesses face cost challenges

Port Moody, May 19: The rising cost of food, shelter, and other expenses pushed Canada’s inflation rate to a 31-year high last month. People are paying a lot more for many basic needs than they were last year at this time, and small businesses are also struggling to manage higher prices for the goods they need to keep going.

At Gabi & Jules bakery and cafe in Port Moody, flour is a key ingredient for the baked goods made by hand on site. It’s also not the only recipe component that’s become more costly, according to co-owner Lisa Beecroft.

Produce is also on that list of higher prices. Beecroft said she’s seen the cost of goods her business relies on creep up over the past year, at a time when fuel surcharges and rent increases are also adding pressure.

“You just feel squeezed on all sides, so I think it’s just really challenging us to be as agile as we can,” she said. “If we can’t afford to sell certain things, we just can’t, because you can only increase your prices so much.”

In April, Canada’s inflation rate was 6.8 per cent, according to the latest Consumer Price Index from Statistics Canada: a 31-year high.

The price of food at grocery stores jumped 9.7 per cent over the same time last year, while the cost of fruit rose 10 per cent. The price of vegetables climbed 8.2 per cent, and meat prices increased 10.1 per cent compared to last April.

Statistics Canada economist Rebecca Lehto said there are multiple factors feeding in to higher food prices.

“We’re seeing pressure from unfavourable weather conditions in growing regions, as well Russia’s invasion of Ukraine is putting pressure on products that contain wheat,” she said. “We’re also seeing higher prices for inputs such as fertilizer and natural gas that’s putting pressure on food prices as well.”

The cost of bread jumped 12.2 per cent, the price of pasta rose 19.6 per cent, and rice increased by 7.4 per cent. A cup of coffee went up 13.7 per cent over last year.

Shelter costs also rose 7.4 per cent in April compared to last year, fuelled by higher prices for home heating methods, such as natural gas.

“In April, the average hourly wages for employees rose 3.3 per cent on a year over year basis,” Lehto said. “And so technically prices are rising faster than wages, and so Canadians are experiencing a decline in purchasing power.”

For small businesses like the bakery, Beecroft said carefully managing costs is critical.

“It’s tough as a small business, because oftentimes you’re pulled so thin or you’re actually out there serving customers or you’re making the product that you don’t have the time to be on top of those numbers,” she said. “But I think that now you don’t have a choice but to be, because it’s going to be kind of key to your survival.”

Beecroft said customers who are also seeing cost hikes at the grocery store are understanding of price increases, but added “everyone has a threshold.” She is hoping people will continue to support local small businesses through yet another tough time.

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