THUNDER BAY – NEWS – The removal of the federal consumer carbon price on April 1 has delivered a major break at the gas pumps for Canadians, including drivers in Thunder Bay and across Northwestern Ontario. However, while energy costs dropped sharply, grocery bills continued to climb—highlighting the uneven nature of inflation relief.
Prices in the grocery stores seem to be on a two pronged path. First prices are going up, due to inflation, and second shrinkflation is seeing many product sizes shrink small amounts at the same or higher prices.
According to Statistics Canada, the national inflation rate slowed to 1.7% in April, down from 2.3% in March, thanks largely to an 18.1% year-over-year drop in gasoline prices. The fall is being attributed to the elimination of the federal carbon levy in most provinces and easing global oil prices, driven by increased production from OPEC nations and declining global demand.
Natural gas prices also dropped 14.1%, adding further downward pressure on the inflation rate. For Northern Ontario households heating homes with natural gas or filling tanks regularly, the reprieve is tangible.
However, when energy is excluded, inflation was 2.9% in April—up from 2.5% in March—signaling that prices in other consumer categories, particularly food, remain hot.
“People may be paying less at the pump, but they’re feeling it at the grocery store,” said a local economist with ties to Thunder Bay’s retail sector. “For fixed-income households and rural communities, food inflation is a much more immediate pain point.”
Statistics Canada reported the following year-over-year increases for April:
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Fresh and frozen beef: up 16.2%
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Coffee and tea: up 13.4%
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Fresh vegetables: up 3.7%
Grocery prices overall rose 3.8%, marking the third consecutive month that food inflation has outpaced the broader Consumer Price Index.
One exception to the national trend was Quebec, which operates its own cap-and-trade system and did not benefit from the removal of the federal carbon tax. As a result, it was the only province that did not experience a decline in inflation last month.
Meanwhile, travel tour prices rose 3.7% month-over-month, partially reversing an 8% decline in March, potentially affecting Northern Ontario residents planning summer vacations.
With the Bank of Canada’s next interest rate decision due on June 4, these inflation dynamics will weigh heavily. The central bank’s key rate currently stands at 2.75%, and April’s numbers may add urgency to decisions about stimulating growth without reigniting price pressures.
For Thunder Bay businesses, especially those in food retail or logistics, the latest inflation trends offer both challenges and opportunities—lower fuel costs ease transportation expenses, but rising food prices may squeeze consumer spending and profit margins.
