Chart 1: Inflation started in goods and spread to services Year-over-year percentage change % 9.0 7.0 5.0 3.0 1.0 -1.0 2020  2021 Goods excluding food and energy  Sources: Statistics Canada and Bank of Canada calculations  2022 Services excluding shelter  Total inflation Last observation: August 2022  With higher goods prices, total CPI inflation was moving up in 2021 too, but it was largely a story of higher inflation for global goods spilling into Canada.
Companies everywhere are under constant pressure to lower costs, and many of them are finding that China and India are attractive places to establish production facilities and service centres. The loss of certain jobs in the home countries of those companies is a sensitive social and political issue and can contribute to protectionist pressures, especially during periods of relative economic weakness.