How to Calculate Inflation in Canada for 2024

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Inflation is a global phenomenon that can be noticed in each country. The prices for goods and items get hiked with time, and you end up paying more for the same products. For instance, if a carton of milk used to cost $5 last year, and it costs $6 now, that’s inflation.

Some countries have a higher rate of inflation compared to others, and Canada is one of them. It has a long history of high price hikes for goods and services every year, contributing to the high rate of inflation in the country.

We built this inflation calculator to help you calculate the inflation rate in Canada within seconds. You can calculate inflation rate from as early as 1960 up to 2022. All you need to do is insert the details in their respective fields: amount, initial year and end year.

What is inflation?

Inflation signifies a price increase in goods and services across the economy. As the prices irise, you have to pay more for the same thing. Deflation, the opposite of inflation, is the case when prices get lower for goods and services. Some low, but regular inflation is good for the economy, but only up to a certain level — generally 2% according to most central banks.

Following sharp price hikes in 2022, the inflation rate in Canada appears to be slowing down slightly at the time of writing in early 2023. The current inflation rate in Canada (as recorded in December 2022) is 6.3%, down from 6.8%, as recorded in November 2022. Excepting volatile energy and food prices, Canada’s annual core inflation stood at 5.3% in December 2022, down from November 2022’s 5.4%.

What causes inflation in Canada?

Canada is one of the nations with the highest inflation rate. It ranked 11th in the list of the G20 nations with the worst inflation rates in 2022. But why is inflation so high in Canada? Inflation in Canada is largely driven by supply constraints and global inflation pressures.

How is the inflation rate calculated?

The inflation rate can't be calculated just by considering a single good and tracking its price changes. You need to consider a "basket" of goods and services. Inflation rates in Canada are calculated using the Consumer Price Index (CPI), which takes a representative basket of goods and services. CPI records their price changes from month to month and year to year.

Generally, the percentage change in the prices of goods and services over the last 12 months is the annual inflation rate in Canada. Here’s a simple formula to calculate inflation in Canada for 12 months:

How does our inflation calculator work?

While calculating inflation for 12 months is quite simple, finding the same for multiple years can be more tricky. To calculate the average annual inflation rate for multiple years, you need to calculate the compound annual growth rate (CAGR) since changes (inflation) in the CPI compound over time. Here’s the formula:

To help you save some time and effort, we have built this inflation calculator for Canada, which helps you determine the changing inflation rate and its effect on the price of the Canadian Dollar, starting from as early as 1960 up to 2022. It’s super-easy to use. All you need to do is insert the details in the respective fields: amount, initial year and end year. And you’ll have the result in seconds.

How much is inflation in Canada?

Inflation in Canada has seen a lot of ups and downs with fluctuating metrics. Here’s a breakdown of Canada’s inflation rate history.

YearInflation rate
2021
3.36%
2020
0.74%
2019
1.95%
2018
2.30%
2017
1.56%
2016
1.42%
2015
1.12%
2014
1.95%
2013
0.90%
2012
1.50%
2011
2.92%
2010
1.84%
2009
0.26%
2008
2.33%
2007
2.20%
2006
1.96%
2005
2.20%
2004
1.85%
2003
2.80%
2002
2.25%
2001
2.52%
2000
2.69%
1999
1.75%
1998
1.00%
1997
1.69%
1996
1.48%
1995
2.22%
1994
0.12%
1993
1.90%
1992
1.45%
1991
5.61%
1990
4.81%
1989
5.06%
1988
3.94%
1987
4.42%
1986
4.13%
1985
3.96%
1984
4.30%
1983
5.83%
1982
10.91%
1981
12.50%
1980
10.00%
1979
9.29%
1978
8.93%
1977
8.04%
1976
7.24%
1975
10.69%
1974
11.02%
1973
7.76%
1972
4.78%
1971
2.96%
1970
3.05%
1969
4.79%
1968
3.87%
1967
3.43%
1966
4.17%
1965
2.44%
1964
1.86%
1963
1.26%
1962
1.27%
1961
1.29%
1960
1.31%
1959
0.66%
1958
2.70%
1957
3.50%
1956
1.42%
1955
0.00%
1954
0.71%
1953
-1.41%
1952
2.90%
1951
10.40%
1950
2.46%
Inflation rates in Canada since 1950

What is your personal rate of inflation?

Currently, our tool can’t calculate your personal inflation rate, but you can calculate it yourself. To calculate your overall personal inflation rate, you need to subtract your total monthly spending from a year ago from your current monthly spending. Then, all you need to do is divide that sum by your monthly spending from a year ago. At last, multiply the outcome by 100 to convert it into a percentage. Here’s the formula:

Let’s take an example to understand it. If your spending in January a year ago was $3,250, and it was $3,500 this January, the difference is $250. Dividing $250 by $3,250 will give you your personal inflation rate of 5.9%. Easy enough, right?

The CPI basket used to calculate the inflation rate is revised and updated every two years based on information and data collected in the biennial Survey of Household Spending (SHS), allowing the CPI to reflect the spending behaviour of the Canadian population. Housing contributes the most to Canada's CPI, which has three groups:

  • Rented accommodation.
  • Owned accommodation.
  • Water, fuel, and electricity.

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What is Canada’s Consumer-Price Index?

The Consumer Price Index (CPI) keeps track of consumer price changes in Canada. Statistics Canada releases CPI data every month for the preceding month, helping people stay informed of the changing rates and the purchasing power of a dollar. A decrease in a dollar’s purchasing power signifies a decrease in individuals' and households' net worth. The following components make Canada’s CPI:

  • Food.
  • Shelter.
  • Clothing and footwear.
  • Transportation.
  • Home furnishings, operations and equipment.
  • Health and personal care.
  • Education, reading and recreation.
  • Tobacco products, alcoholic beverages and recreational cannabis.

Here are the contributors of the leading CPI categories to Canada’s inflation rate:

Category12-Month Change (CPI)Basket Weight (% of CPI)Contribution to September 2022's Inflation Rate
Food
10.3%15.94%1.6%
Shelter
6.8%29.8%2.0%
Household
5.4%14.5%0.8%
Clothing
1.5%4.31%0.1%
Transport
8.7%16.91%1.5%
Health
4.4%4.62%0.2%
Recreation
5.2%9.29%0.5%
Alcohol, tobacco and cannabis products
3.8%4.63%0.2%
Canada Inflation CPI categories

6 Tips for coping with inflation

Coping with inflation can be a lot easier if you know just the right tricks. Here are the top six tips to help you minimize the impact of inflation:

  • Cut down your nice-to-haves list. Eat at home instead of dining out or ordering in.
  • Work towards a promotion or switch to a better-paying job.
  • Determine how much inflation is affecting you. 
  • Make a monthly budget and stick to it. 
  • Consider a side job to open new streams of income.
  • Take care of your home and yourself to avoid spending more when it becomes a big problem.
  • Compare rates and switch your home insurance or car insurance to save on premiums.

How can you beat inflation when investing?

There are tons of investing options in Canada that can help you beat inflation. From stocks and savings accounts to newer exchange-traded funds (ETFs) and cryptocurrency, the possibilities are endless. Here are some of the best ways to tackle inflation when investing:

  • Invest in stocks directly.
  • Mutual funds investment.
  • Invest in real estate or gold.
  • Inflation-indexed bonds.
  • Investment in commodities or cryptocurrencies.

Other than these ways, you should also try rebalancing your portfolio. Also, try to avoid unjustified expenses and plan your finances wisely.

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Alexandre Desoutter
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Alexandre Desoutter has been working as editor-in-chief and head of press relations at HelloSafe since June 2020. A graduate of Sciences Po Grenoble, he worked as a journalist for several years in French media, and continues to collaborate as a as a contributor to several publications.

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