August brought significant economic shifts and housing trends in Canada that warrant attention. With the Consumer Price Index (CPI) surging year-over-year, driven by rising gasoline and housing costs, and provincial housing gaps evolving according to the Canadian Mortgage and Housing Corporation (CMHC), business owners and individuals need to take note. Rising inflation poses both challenges and opportunities, while initiatives to address housing issues in Ontario provide important insights, especially in Niagara.
In August, Canada witnessed a significant year-over-year surge in the Consumer Price Index (CPI), soaring to 4.0% compared to July's 3.3%. This jump was primarily driven by surging gasoline prices and escalating rent and mortgage interest costs. Even when excluding gasoline, the CPI still exhibited a notable increase of 4.1%. Although travel-related service prices decreased, there was a more moderate rise in food prices. On a monthly basis, the CPI expanded by 0.4%, largely attributed to decreased prices for travel tours and air transportation following the peak of summer travel demand.
Gasoline prices recorded their first annual increase since January 2023, influenced partly by a base-year effect. Nationally, shelter prices, particularly rent, surged by 6.5%, while grocery price growth slowed but remained elevated, with varying trends in different food product prices. Prices surged at a quicker pace across all Canadian provinces in August compared to July, with Alberta experiencing the most significant energy price hike, driven by natural gas and electricity costs, influenced by the phasing out of provincial rebates.
For business owners, rising inflation presents both challenges and opportunities. Successfully navigating this landscape entails a proactive approach to cost management, pricing strategies, and adaptability to evolving market conditions to sustain profitability and competitiveness. Staying well-informed about economic trends and government policies is vital for making informed business decisions.
Meanwhile, the Canadian Mortgage and Housing Corporation (CMHC) reports a shifting housing gap landscape, with Ontario displaying a narrower gap compared to 2022, while other provinces grapple with an expanded shortfall. Minister Filomena Tassi, overseeing FedDev Ontario, has introduced a user-friendly funding application process aimed at facilitating easier and more predictable access to investments for growth-oriented clients. Funding applications will be accepted thrice annually—during fall, winter, and spring—with the current fall intake open until November 7. FedDev Ontario, as one of Canada's seven regional economic development agencies, collaborates with industry leaders and organizations to unlock potential, fostering competitiveness, innovation, and diversity in Southern Ontario's economy through strategic investments.
Furthermore, the Ontario government is directing nearly $4 million toward establishing 25 supportive housing units in Niagara Falls, catering to individuals and families grappling with chronic homelessness. Situated at 5528 Buchanan Avenue, this two-story, recently renovated former motel offers bachelor apartments for individuals, larger accommodations for families, and accessible units, alongside dedicated space for counselling and social programming. Associate Minister of Housing Nina Tangri announced this funding initiative, emphasizing its aim to provide long-term housing solutions for vulnerable residents in the Niagara Region. This initiative is part of the province's Social Services Relief Fund, which has provided substantial support during the COVID-19 pandemic to address homelessness and housing needs in Ontario. Additionally, the Ontario government is increasing its annual investment in homelessness prevention programs by $202 million, including $9.6 million designated for the Niagara Region, bringing the total annual investment to nearly $21 million.
Sources:
https://www150.statcan.gc.ca/n1/daily-quotidien/230919/dq230919a-eng.htm?HPA=1| https://www.cmhc-schl.gc.ca/media-newsroom/news-releases/2023/update-canada-housing-supply-shortages | https://news.ontario.ca/en/release/1003453/ontario-providing-more-supportive-housing-in-niagara-region