Rent and housing prices send Thunder Bay's inflation rate to 7th highest in Canada

CBC

2 days ago

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Thunder Bay, Ont., has the seventh highest rate of inflation in Canada, according to Statistics Canada.
This week, the national data agency released its report for June. Overall, the country experienced an annual inflation rate of 1.9 per cent, an increase from 1.7 per cent in May.
The report, broken down by cities and regions, indicates Thunder Bay's inflation rate has more than doubled, from 0.9 per cent to 2.1 per cent.
Mehdi Arzandeh, an assistant professor at Lakehead University's faculty of business administration, said Thunder Bay's inflation situation stands apart from other major cities in the country.
"There are some underlying factors that make things that we consume everywhere in Canada more expensive... the price of cars went up, price of footwear [and] furniture," Arzandeh said.
But, Arzandeh noted, what sets Thunder Bay apart from other cities in Canada is the state of its rental market.
"In the last month, to put it in perspective, the rent on average in Canada went up by about 0.3 per cent, [and] in Toronto 0.9 per cent — in Thunder Bay it went up by 3.8 per cent."
Unsteady atmosphere
Nationwide, the continuing rise in inflation is in line with current trade disputes with the United States.
Doug Porter, chief economist at BMO Financial Group, said inflation showed no real improvement in June, in part because the trade war is pushing up some prices. The high cost of housing is also a contributing factor that's keeping inflation up, Porter said.
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However, Thunder Bay stands in contrast to the rest of the country in its resilience to the impacts of the current trade dispute, Arzandeh argued.
"Part of a good thing about the Thunder Bay economy is the fact that it proves to be resilient actually in the face of some of the trade disputes," he said.
Because of our location, because of the port of Thunder Bay, we see more activity in our economy due to some of these trade disputes - Mehdi Arzandeh, Lakehead University, assistant professor
But if the increase in the price of housing in Thunder Bay persists, Arzandeh argued, it could have some long-term consequences on the city's affordability.
"Thunder Bay has become more popular with international students and newcomer international students," he said. "If you see newcomers because we have a growing economy, in the face of trade issues and geopolitical risk, you might not be ready to accommodate all those rental unit demands in Thunder Bay."
Growing economy
Thunder Bay has the potential for economic growth in the near future, according to Arzandeh.
As exports to the U.S. begin to dwindle due to ongoing trade disputes, companies may be looking toward Thunder Bay.
"Consumer goods are going to go up unfortunately due to the tariffs," he said. "Because of our location, because of the port of Thunder Bay, we see more activity in our economy due to some of these trade disputes."
According to Arzandeh, as Canadian companies look for markets in Europe and South America in the wake of tariffs, Thunder Bay is primed to facilitate those changes.
"If chemicals and minerals are to be exported to new European markets and Latin American markets, they're going to happen through the port of Thunder Bay."