Milton residents feel the pinch despite falling inflation

By: Shazia Nazir, Local Journalism Initiative Reporter, The Milton Reporter

“I try to be very economical while spending money, but grocery items feel more expensive each time I visit a store. Though gasoline prices have come down, feeding a family of six is still harder,” said Milton resident Sarah Kim, a mother of three.

Kim was talking about Canada’s inflation rate, which fell to 1.6 per cent in September after reaching the Bank of Canada’s 2 per cent target in August.

Statistics Canada reported the smallest yearly increase since February 2021, driven by a 10.7 per cent drop in gasoline prices. Excluding gas, inflation remained at 2.2 per cent.

Despite the slowdown, rent and grocery prices remain elevated, with food prices rising faster than headline inflation.

Naeem Khan, a local resident, was expecting more relief. “It is pleasant to know that inflation is slowing, but rising rent is too concerning for us. We spend a lot on housing and want the government to develop a long-term solution to make living in Milton affordable.”

Rent grew 8.2 per cent year-over-year, slower than August’s 8.9 per cent increase. Analysts predict a potential 50-basis-point rate cut by the Bank of Canada at its October 23 meeting, following three cuts earlier this year.

For the second consecutive month, food prices grew faster than headline inflation. Prices declined year-over-year for seafood, nuts and seeds, and fish but increased for fresh and frozen beef and eggs.

“Canadian headline inflation decelerated by more than expected last month, lowering the hurdle to an outsized rate cut at next week’s Bank of Canada meeting,” said Karl Schamotta, chief market strategist at Corpay.

“We’re still not convinced the Canadian economy needs an emergency-scale response, but there is little question today’s data will lower the downside risks associated with moving more aggressively,” Schamotta said.

Rajesh Patel, a newcomer to Milton, also discussed rising food and housing prices in the area. “A reduction in gasoline prices will be offset by increased food and rent prices.”

“People feel relief when they see an overall reduction in their monthly budget. Housing is the biggest issue in terms of affordability. More than half of my earnings go towards rent and utilities,” Patel said.

Consumer prices have steadily declined since the beginning of the year. In August, they reached the midpoint of the Bank of Canada’s 1 to 3 per cent target range, as high interest rates dampened consumer demand and slowed business investments.