Ontario restaurant price hikes boost food inflation after minimum wage increase

Restaurant price hikes led food inflation 3.7 per cent higher year-over-year in January, with analysts saying the bump likely comes from Ontario eateries attempting to offset the province's recent minimum wage increase.

Statistics Canada says food prices were 2.3 per cent higher last month compared to January 2017. That follows a 2.9 per cent year-over-year increase for dining out in December.

CIBC World Markets' Royce Mendes says strengthening consumer prices could in part be attributed to Ontario increasing its minimum wage more than 20 per cent at the start of the year.

He notes Ontario outpaced other provinces and territories in monthly price increases in certain categories, including restaurant prices.

Statistics Canada's figures show the province's restaurant prices in January rose 1.9 per cent from the previous month. The next largest monthly increase happened in Alberta where prices rose 0.7 per cent.

 BMO Capital Markets senior economist Robert Kavcic says Ontario's large jump in restaurant prices is ``an entirely predictable response.''