Canada Hits ‘Milestone Moment’ as Inflation Rate Drops Below 3%, Says Freeland

Deputy Prime Minister and Finance Minister Chrystia Freeland arrives for a cabinet meeting on Parliament Hill in Ottawa on April 18, 2023. (The Canadian Press/Sean Kilpatrick)

Finance Minister Chrystia Freeland says that Canada has hit a “milestone moment” as the nation’s inflation rate dropped below 3 percent in June, according to a recent Statistics Canada report, which is its lowest point in about two years.

“That is a significant moment. It should provide a lot of relief to Canadians,” Ms. Freeland told reporters via teleconference on July 18 from Delhi, India, where she was attending a G20 finance ministers’ meeting, according to CTV News.

“I really want to thank Canadians, it has been a really tough time economically since COVID first hit, since we had a recession, followed by all the strains of reopening. And this is really a good moment.”

Ms. Freeland was addressing a Statistics Canada report published on the same day showing that the country’s inflation rate fell to 2.8 percent in June, which represented a significant decrease from its rate of 3.4 in May.

The last time Canada’s inflation rate had fallen below 3 percent was in March 2021.

“It has been a real struggle for Canadians and the Canadian economy to get back down to 2.8 percent, and I am really grateful to everyone who has sort of [stayed] the course,” Ms. Freeland said.

Following its latest interest-rate hike earlier this month, the Bank of Canada is now projecting that Canada’s annual inflation rate will hover around 3 percent for the next year before returning to its 2 percent target in the middle of 2025.

Reporters asked Ms. Freeland for her take on the central bank’s assessment, but the finance minister said she would not “make predictions or forecasts.”

“I do not have a crystal ball,” she said. “I do think that today is a milestone moment.”

Inflation

Despite the drop in the country’s inflation rate, Statistics Canada found in its recent report that Canadians are still paying substantially higher-than-usual prices for groceries, as prices rose 9.1 percent year-over-year last month, which was slightly faster than in May.

Opposition parties pointed this out in responding to Ms. Freeland on July 18, with Conservative Deputy Leader Melissa Lantsman saying that the finance minister’s comments were “as out of touch as it possibly gets.”

“Who on earth is the Finance Minister actually speaking with?” Ms. Lantsman wrote on Twitter.

“Grocery prices up 9%. Mortgage interest up 30%. Food and housing keep getting more and more expensive, but sure ’milestone moment' for her,” she wrote.

NDP finance critic Daniel Blaikie also commented on the new Statistics Canada data, saying that while the new inflation numbers “show some progress,” the cost of everyday essentials like food and gasoline still remain “stubbornly high” across the country.

“This news will not bring relief for Canadians struggling with record prices and unprecedented line ups at food banks across the country,” Mr. Blaikie said in a statement on July 18.

The Canadian Press contributed to this report.