Canadian inflation rises in April; gas prices strengthen from carbon pricing

Excluding gasoline, the inflation rate rose 2.3 per cent in April compared to a year earlier

Statistics Canada’s offices at Tunny’s Pasture in Ottawa are shown on Friday, March 8, 2019. (THE CANADIAN PRESS/Justin Tang)

Canada’s annual inflation rate picked up its pace in April for a third-straight month due in part to stronger gasoline prices in provinces with new carbon-pricing systems.

The consumer price index posted a year-over-year increase of two per cent last month, up from its reading of 1.9 per cent in March and 1.5 per cent in February, Statistics Canada said Wednesday in a new report. The move brought it in line with the Bank of Canada’s ideal two per cent target.

The report said the six provinces where carbon levies were introduced or increased in April saw a larger month-over-month rise in prices at the pump.

The federal Liberal government imposed carbon levies last month on New Brunswick, Ontario, Manitoba and Saskatchewan because they did not have similar systems of their own. The federal move has caused controversy, and provincial governments have vowed to fight the mandated systems.

READ MORE: Vancouver expected to headline long Canadian summer of high gasoline prices

Last month, Prince Edward Island introduced its own carbon-pricing system and British Columbia increased its existing levy.

“Absolutely, when you increase the price of gasoline by applying the carbon price it’s obviously going to show up in the numbers,” said Alicia Macdonald, principal economist with The Conference Board of Canada.

She added that the levies were one of several factors that put upward pressure on pump prices. Others included the annual switch to summer-blend gasoline and higher global oil prices, she said.

Under the federal carbon-pricing program, the Liberals have said 90 per cent of the revenues collected will be returned via rebates to households in each of the four provinces. Consumers will get by far the largest share because the government expects them to ultimately pay most of the new costs, passed down from businesses.

Gas prices rose month-to-month in April in all provinces — and, combined, were up 10 per cent.

Excluding gasoline, the inflation rate rose 2.3 per cent in April compared to a year earlier.

Consumers paid more last month for mortgage borrowing costs, fresh vegetables and autos last month, while they saw lower price tags for hotels, kids’ clothing and digital equipment.

April’s headline inflation reading matched expectations from economists.

In reaching the mid-point of the Bank of Canada’s inflation target zone of one to three per cent, governor Stephen Poloz is unlikely to be under immediate pressure to move his trend-setting interest rate in either direction.

“It just reinforces the notion that the Bank of Canada is in a wait-and-see mode,” Macdonald said.

The Statistics Canada report said the average of its three gauges for core inflation, which are considered better measures of underlying price pressures by omitting volatile items like gasoline, slowed slightly to 1.9 per cent in April, down from two per cent the previous month.

Andy Blatchford, The Canadian Press

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Central Okanagan schools ready to welcome students back

Students are set to go back to school next Monday, June 1

Van runs over fire hydrant, spraying water into West Kelowna mobile home park

The incident occurred around 5:40 p.m. near Boucherie Road

North and Central Okanagan on flood watch

Kalamalka Lake users are asked to take measure to reduce the risk… Continue reading

Okanagan-shot film “The Colour Rose” wins two cinematography awards

Locations in the Okanagan were used such as; The Casorso residence, BNA, Father Pandosy, Venture Academy and Idabel Lake Resort

B.C. legislature coming back June 22 as COVID-19 emergency hits record

Pandemic restrictions now longer than 2017 wildfire emergency

Houseboat company partly owned by Shuswap MLA withdraws controversial ad

The ad welcomed houseboaters from other provinces, contradicting anti COVID-19 measures.

Squabble between campers in North Shuswap leads to bear spraying

An argument over late night partying escalated into a fight which led to one person being sprayed

B.C.’s essential grocery, hardware store employees should get pandemic pay: retail group

Only B.C.’s social, health and corrections workers are eligible for top-ups

Edmonton, Vancouver and Toronto vying to be NHL hubs, but there’s a catch

The NHL unveiled a return-to-play plan that would feature 24 teams

B.C. sees 9 new COVID-19 cases, one death as officials watch for new cases amid Phase Two

Number of confirmed active cases is at 244, with 37 people in hospital

Penticton may soon allow drinking alcohol in some public places

Trying to inconspicuously drink on the beach could become a thing of the past

VIDEO: Flowers stolen from Vernon distillery

Okanagan Spirits Craft Distillery captured surveillance footage of the thief in a black car

Fundraiser launched for North Okanagan drive-in

Vernon resident seeks to raise $20K to save Starlight Drive-In

Most Read