Canadian inflation rose 4.1 per cent in August, the highest monthly year-over-year increase since 2003, Statistics Canada reported Wednesday. Here are the key takeaways:

How bad is it?: The Bank of Canada aims to keep inflation between one and three per cent, so 4.1 per cent is a big overshoot, especially after the numbers in June (3.1 per cent) and July (3.7 per cent).

Prices rose in seven of the agency’s eight categories of goods, with transportation leading the way: gas prices were up 32.5 per cent compared to August 2020, and passenger-vehicle prices rose 7.2 per cent. Shelter prices rose 4.8 per cent, with an index of homeowners’ replacement costs increasing 14.3 per cent, the biggest yearly rise since 1987. Only clothing and footwear was cheaper this August than a year ago, by 0.2 per cent.

What’s going on: The Consumer Price Index measures changes since the same month the previous year, and 2020 was a deeply weird time.

“Inflation continues to be higher than before the pandemic. That’s mainly because inflation compares today’s prices with those of a year ago, when much of the economy was still locked down,” Bank of Canada governor Tiff Macklem said in a speech last week, explaining why he wasn’t too concerned. Also, some industries are coping with supply disruptions.

This happened with wood, for example: prices spiked as homebuilders, renovators and DIYers bid up a market where supply was limited. Those prices have recently descended to normal.

Politicians have reacted politically: A federal election campaign is underway and the cost of living, especially for housing, has been key.

The Conservatives have blamed the Liberals’ deficit-funded pandemic programs and responded to the inflation news by attacking them and the NDP for planning “more reckless spending. More massive debt. And more rising prices.” They argue the Liberals are pumping money into an economy that doesn’t need it, with the Bank of Canada’s support.

Regardless, both the Liberal and Conservative plans follow pretty similar spending tracks over the next five years.

A bonus for the digital economy: StatCan revealed a new inflation index for the digital economy, incorporating cellphone services, parcel delivery, internet access, ride sharing, and streaming. It said those prices collectively fell 4.8 per cent between August 2020 and 2021.