August CPI falls to 2.0% but protein inflation persists

Statistics Canada published consumer price index (CPI) data for August on September 17th, and inflation for All Items has fallen to the Bank of Canada’s (BoC) 2.0% target range for the first time since February 2021. The BoC began raising interest rates in March 2022 to combat inflation, and has now started to reduce rates as the economy has slowed. This is reflected in the CPI data and other metrics such as rising unemployment, both of which suggest that rate cuts will continue.

Despite this progress, inflation for the key meat proteins remains above the 2.0% range, led this month by pork which saw prices rise 8.7% compared to last year. Beef prices rose by 7.4% during this time. Although still above the All Items level, chicken inflation was much tamer over the last twelve months, rising 2.4%.

In the graph above, we can see the relative strength of the price increases for the three main proteins since 2013. Compared to 2002’s baseline, a dollar can now buy about half as much chicken and a little more than a third as much beef as it did then. Pork prices have increased significantly less over this time than either chicken or beef.