Inflation in Canada rose to 7.7% in May 2022, making it the biggest increase since Jan. 1983.
According to Statistics Canada, gasoline, hotel rates and cars are among the largest contributors to the increase in May.
Energy prices have increased by 34.8% compared to last year. The price of gasoline has increased by 48.0% compared to a year earlier.
Excluding gasoline, the Consumer Price Index has risen by 6.3%, following a 5.8% rise in April.
The cost of food has risen by 9.7%, while the cost of services saw a 5.2% increase.
Meanwhile, the price of traveller accommodation rose by 40.2%, while restaurant prices have increased by 6.8%.
The historically-high inflation rate puts additional pressure on the Bank of Canada to deliver even more aggressive interest rate hikes. According to Bloomberg News, interest rates are expected to reach as high as 3.5% by the end of this year.
Conservative Party interim leader Candice Bergen reacted to the news by stating that “Canadians need relief from the cost-of-living crisis.”
Meanwhile, Conservative leadership candidate Pierre Poilievre called for the end of “inflationary deficits.”
Poilievre has also called on Trudeau to suspend the gas tax for the summer so that Canadians can have financial relief.
In recent months, Poilievre has been highly critical of the BoC. The Carleton MP has accused the BoC’s governor Tiff Macklem of being an “ATM” for Prime Minister Justin Trudeau’s deficit spending and fuelling inflation. Poilievre has pledged to fire Macklem if he’s elected prime minister.
Scott Aitchison also reacted to the news by saying “families are struggling to pay the bills. Enough is enough.”
Meanwhile, Roman Baber blamed Trudeau’s unwillingness to develop natural resources on the high fuel prices that are causing inflation.
Last week, Finance Minister Chrystia Freeland unveiled the federal government’s plan to address the historically-high inflation rates. While touting “fiscal restraint,” Freeland continued to tack on government spending by announcing $8.9 billion in measures to “tackle affordability.”
In response, Scotiabank economists decried the Trudeau government’s lack of action in reducing government spending. In its report, Scotiabank argued that the burden of lowering inflation is falling on the private sector as the federal government continues to spend at high levels.