Manitoba continues to see inflation rate drop, experts say there's still a ways to go

The latest inflation numbers are out from Statistics Canada and the Consumer Price Index shows inflation continues to slow throughout Canada, including in Manitoba.

February 2023's inflation rate came in at 5.2 per cent in Canada, while in Manitoba the number sits at 6.4 per cent.

Both have dropped since January – 5.6 in Canada and 6.9 in Manitoba – sticking with a trend that started in the back half of 2022.

"I think that that's obviously a good sign for both Manitobans and Manitoba businesses, is that it seems like the majority of the pressures that we felt as a result of inflation with those cost pressures is behind us," said Chuck Davidson, the president and CEO of the Manitoba Chambers of Commerce.

Davidson said the hope is this decrease will continue and it will lead to prices in the province flattening out.

"So I think what this really will start to do is restore confidence for Manitobans that have taken on increased debt, and so have businesses over the course of the last number of years as well, to put them to a more stable position."

Loren Remillard, the president and CEO of the Winnipeg Chamber of Commerce, said while the number in Manitoba is still high – the third highest in Canada – the situation is trending in the right direction.

"Every time we've spoken with our members, surveyed our members, inflation is amongst the top three concerns and challenges that they're facing," said Remillard. "But for now, everything seems to be trending in the right direction, which would give an indication that perhaps we've peaked and we can start making some plans for a time when we won't be in this level of inflation."

COULD PRICES DROP AT THE GROCERY STORE?

As inflation has skyrocketed since the pandemic, so has the price of everyday goods in Manitoba, such as food at the grocery store.

Michael Mikulak, the executive director of Food and Beverage Manitoba, said it's hard to say if prices will drop for food items the same way the price of oil and gas climbs and falls with inflationary changes.

"I think it's highly dependent on what drops. Will the cost of oil come down? Will other things? I mean, there could be a lag. It really depends on what position a lot of these companies were in coming into it, where they were able to position themselves," said Mikulak.

"I don't think there is a simple answer to when food prices will stabilize, or come down. I'm not sure if they will come down substantially. I mean, I think at this point, everybody's hopeful that they will start to stabilize."

He noted the food industry is impacted by so many other factors, pointing to the war in Ukraine, the COVID-19 pandemic and even climate change.

Mikulak added food producers that he has talked to say they have been trying to pass on the savings to Manitobans wherever it is possible.

"Just know that the food and beverage manufacturers across this country are working hard to keep those costs at bay and really to pass on any savings that they're able to. The margins in this sector are extremely small, most are operating in single digits. So this is not a sort of attempt to make a buck off of this."

WHAT IS A STABLE INFLATIONARY NUMBER MANITOBANS SHOULD LOOK FOR?

Both Remillard and Davidson said there is still a ways to go before inflation is viewed as stable in the province.

"I think it'd be similar to what we're expecting with the Bank of Canada and I think the Bank of Canada set inflationary rates of two per cent. So we're still a ways from that point, but I think all signs seem to be that we're heading in that direction," said Davidson.

The two per cent mark is a number that Remillard said Manitobans have learned to live with.

"We felt that it created the appropriate level of growth, but didn't create undue pressures in the system, you know runaway costs, runaway pressures, which we've seen in other countries where you see hyperinflation," said Remillard.

"I think at the end of the day, the perfect number for any Manitoban is one that allows me to be able to plan with confidence and that I can make sure that I'm maximizing my discretionary spending, make all my bills that I need to pay and have a little left over to enjoy, you know, the full quality of life that people want."