Breaking News
Get 40% Off 0
🔎 See NVDA's full ProTips for an instant risks or rewards Claim 40% OFF

'Perfect storm' swirls as Canadians face hot inflation, rising rates

Published Oct 30, 2022 09:06AM ET Updated Oct 31, 2022 06:02AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
5/5 © Reuters. Volunteers fill boxes with donated food at the Ottawa Food Bank warehouse in Ottawa, Ontario, Canada October 27, 2022. REUTERS/Julie Gordon 2/5

By Julie Gordon and Rod Nickel

OTTAWA/WINNIPEG, Manitoba (Reuters) -At a warehouse on an industrial stretch in Ottawa, giant metal crates of donated groceries are piled high as volunteers sort canned goods, pasta and other foods to be distributed to pantries around the Canadian city.

Demand has surged 33% at the Ottawa Food Bank from pre-COVID-19 pandemic levels, with visits up as spiraling grocery, gas and rent prices, along with fast-rising borrowing costs, leave more Canadians struggling to make ends meet.

"We are absolutely seeing more people," said Rachael Wilson, chief executive of the Ottawa Food Bank, adding the organization is now spending C$6 million ($4.4 million) a year on food, up from C$2 million pre-pandemic.

"That's because the cost of food has risen ... but also because of the number of people that are turning to a food bank right now," said Wilson. "It is unfortunately a perfect storm."

Canada's headline inflation rate has eased to 6.9% from a peak of 8.1%, but food costs are still accelerating and underlying price pressures remain sticky.

At the same time, the Bank of Canada (BoC) has hiked interest rates by 350-basis points in just seven months, one of its sharpest tightening campaigns ever, to try to force inflation back to its 2% target.

The result is Canadian consumers and small businesses are being squeezed from both sides, prompting politicians, unions and even some economists to implore the central bank to slow its pace of tightening.

The bank this week signaled its tightening campaign was nearing its peak, but made clear it was not done yet, as it hiked rates by 50-bps to a fresh 14-year high.

In a television interview after the decision, BoC Governor Tiff Macklem said restoring price stability was not easy, but rampant inflation would be worse.

"I understand a lot of Canadians are in debt and interest rate increases will put more stress on them. It is something that we are watching closely," he told Radio-Canada.


Canada, with its pricey homes and top of the G7 household debt levels, is particularly sensitive to higher interest rates, with fears mounting the BoC's aggressive hikes will trigger a recession.

Wes Farnell, who runs Eight Ounce Coffee in Calgary with his wife Jen, said their specialty coffee equipment business was growing by 25% to 35% a year before the pandemic, and then boomed as lockdowns led to surging demand for high-end lifestyle appliances.

Now he is already seeing signs that hot inflation and recession worries have consumers focused on essentials rather than luxury appliances, which is adding up to fewer large orders even as the holiday shopping season approaches.

"Our wholesalers are definitely more tentative about spending money," said Farnell. "Everyone's nervous ... Will people be spending money? Will there be any money to spend? Will inflation go up even further?"

The pain is also being felt on the farm, where record high debt levels and surging operating costs are weighing on many farmers, despite strong grain prices.

For Brodie Haugan, who farms with his parents near Orion, Alberta, inflation has hit especially hard, coupled with a relentless drought.

With the price of feed rising faster than cattle prices, Haugan reduced his 400-cow herd by 30% in spring.

He also delayed buying a much-needed new truck, as the cost shot up to C$100,000 from C$75,000 pre-pandemic.

"Right across the board, everything has increased in price, making it very difficult to really do anything at all," Haugan said.

($1 = 1.3516 Canadian dollars)

'Perfect storm' swirls as Canadians face hot inflation, rising rates

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your profile, will be public on and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email