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

Just Posted

Greater Victoria teacher’s certification suspended for inappropriate conduct with female students

Gregory Garos was employed by the District as a middle school teacher

West Saanich Road to get $1.5 million bike lanes extension

Allterra Construction awarded contract after their bid undercut rivals by $500,000

Saanich councillor questions effectiveness of free transit passes for youth

Coun. Judy Brownoff said efforts should focus on improving service levels

Victoria’s historic Point Ellice House re-opens after months of closure

A new exhibit will be on display at the house to explore the ‘Politics of Luxury’

International, Disney and Hallmark films set to be filmed in Victoria in 2019

Local and international production companies seeking out film locations in town

Rents in most Canadian cities are unaffordable for lower-income earners: study

Roughly one-third of households, or 4.7 million, are renters

POLL: Do you carry reusable shopping bags?

While a court ruling determined the City of Victoria’s plastic bag ban… Continue reading

Greater Victoria wanted list for the week of July 16

Greater Victoria Crime Stoppers is seeking the public’s help in locating the… Continue reading

B.C. government seeks advice on reviving Interior forest industry

Public website opens as meetings start with community leaders

Film features Chez Monique, an off-the-grid restaurant on West Coast Trail in B.C.

“The story we are trying to share is of the loving haven they created and sustained for decades.”

Psychics, drones being used to search for missing Chilliwack woman with dementia

Drones, psychics, dogs and more have been employed to help find Grace Baranyk, 86

Scheer on Trump: It’s ‘offensive’ to question the family background of critics

Trump is being called a racist for saying that the four congresswomen should go back where they came from

Instagram expands Canadian pilot removing ‘like’ counts to more countries

Social media giant plans to roll out the test in Australia, New Zealand, Brazil, Japan, Italy and Ireland

Man involved in beating and tasering over a drug debt to be sentenced in Nanaimo

Colin Damen Gary Lamontagne pleaded guilty to charges, including aggravated assault

Most Read