Thunder Bay posts 0.8% inflation; Bank of Canada eyes Sept. 17 decision as core stays near 3%
THUNDER BAY – ECONOMY – Canada’s annual inflation rate cooled to 1.7% in July (down from 1.9% in June), driven largely by cheaper gasoline. But the reprieve at the pump was partly offset by faster increases for groceries and shelter, keeping the pressure on Northern Ontario households.
What changed in July
-
Gasoline: Prices fell 16.1% year-over-year, reflecting the removal of the consumer carbon levy earlier this year, a ceasefire between Iran and Israel, and higher OPEC+ output. Month over month, gas dipped 0.7%.
-
Groceries: Food-at-home inflation accelerated to 3.4% (from 2.8% in June). Notable spikes: coffee +28.6%, confectionery +11.8%, and grapes +29.7%—largely from poor growing conditions in key producer countries.
-
Shelter: The shelter index ticked up to 3.0% (from 2.9%), the first acceleration since Feb. 2024, with rent rising faster and Ontario seeing higher natural gas prices on the month (Ontario NG up 1.8% m/m after a -14.0% June). Mortgage interest costs continued to decelerate.
Northern Ontario snapshot
-
Thunder Bay CPI: Annual inflation ~0.8% in July (vs. 2.1% in June)—well below the national rate, offering some local relief even as food and shelter remain the pain points.
-
Energy & heating: StatsCan flagged smaller declines in natural gas nationally because of higher Ontario prices—something to watch heading toward heating season.
Why this matters for your wallet
-
Groceries: Even with headline CPI easing, food remains sticky. Coffee, chocolate, and some fresh fruit are driving bills higher in Northwestern Ontario. Consider switching brands/sizes and watching flyers as these categories are likely to stay volatile given crop issues.
-
Housing: Rent growth accelerated nationally. While Thunder Bay’s overall CPI is low, tight rental markets in parts of the region mean shelter pressure can diverge from headline inflation.
-
Fuel: Pump prices helped cool inflation; if crude rebounds or geopolitical risks flare, this support could fade.
The Bank of Canada angle
The policy rate is 2.75% after a July hold; the next decision is Sept. 17. The Bank’s preferred core measures (CPI-trim/median) are ~3% y/y, but shorter-term momentum has slowed—one reason markets and some economists think a quarter-point cut in September is plausible if softness persists.
NetNewsLedger analysis: Three takeaways for Northwestern Ontario
-
Headline relief, everyday strain: Thunder Bay’s low headline rate masks the reality that grocery and shelter are still biting—categories that dominate monthly budgets here.
-
Heating costs in focus: Watch natural gas into fall/winter. Ontario’s July uptick narrowed earlier declines; a cold start to the season could quickly change the bill math. Source: Statistics Canada
-
Rate risk easing—but not gone: A BoC cut would lower borrowing costs at the margin (variable mortgages/HELOCs), but with core around 3%, any easing is likely gradual, not a return to ultra-low rates. Budget assuming sticky food and rent into year-end.
