Calgary Economy: Inflation Surge Pressures Wallets

CALGARY — Calgarians are bracing for a challenging economic climate as inflationary pressures mount, impacting both wallets and the broader market landscape. December's Consumer Price Index (CPI) data reveals a national inflation rate of 2.4% year-over-year (y/y), with Alberta trailing slightly at 2.1%. As grocery prices soar by 5.0% y/y and restaurant meals spike by 8.5%, the rising cost of living is hitting home.

GST Holiday's Lingering Effects Drive Inflation

The uptick in inflation, notably higher than November's figures, is partially attributed to the GST/HST holiday's base-year effects. This temporary tax relief, which ended in early 2025, artificially depressed prices last year, creating a higher year-over-year comparison. While gasoline prices have declined by 13.8% y/y, providing some relief, the continued increase in core inflation metrics like CPI-median and CPI-trim, now at 2.5% and 2.7% respectively, underscores persistent inflationary trends.

Business Leaders Urge Caution Amid Inflation Concerns

Industry voices, including ATB Economics' Rob Roach, highlight the complexities of the current economic environment. Although the Bank of Canada has maintained its policy rate at 2.25%, the spectre of inflation remains a concern for business owners and consumers alike. With no direct commentary from the Calgary Chamber of Commerce or the CREB on this month's data, the focus shifts to the broader implications of these inflationary pressures. As businesses grapple with rising costs, the call for strategic financial planning grows louder.

Looking ahead, the outlook for Q4 remains uncertain. With the Bank of Canada adopting a "wait and see" approach, the market could stabilize if core inflation trends continue to ease. However, any economic uptick may prompt a reconsideration of interest rates, potentially leading to further market adjustments.