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

EDITORIAL: Revisiting alcohol consumption

A proposal to allow alcohol consumption in some public spaces in Penticton deserves consideration

Okanagan Skaha School District to reopen playgrounds

Facilities will reopen to the public on June 1

Gas prices rising across the Okanagan, Shuswap

Prices at some gas stations in the Okanagan sit around 115 cents a litre

Be prepared for high water, says RDOS

Higher than average water detected around the Ashnola Rover and Similkameen River

Poll: Should Penticton allow drinks on the beach?

Legally drinking in some Penticton parks and beaches could become a reality as early as June 5

Only four new COVID-19 cases, 228 active across B.C.

Health officials watching as activities ramp up

COVID cancelled their wedding plans, so they married on a BC mountaintop

Ceremony was live streamed to friends and family around the world

Mother duck and babies rescued from Highway 97 in Lake Country

The mother and nine ducklings were taken to Duck Lake

Chef brings farm-to-table approach to new Shuswap restaurant

Darren Bezanson opening Bistro 1460 at Hilltop Inn

Trudeau acknowledges racial unrest in U.S.; ‘We also have work to do in Canada’

‘Anti-black racism, racism, is real; it’s in the United States, but it’s also in Canada,’ Trudeau says

Bear fails to interrupt golfers in Vernon

‘It definitely was hard to putt with a bear that close, but we got it done’

State of Local Emergency declared for Boundary as communities brace for river flooding

Warm weather and heavy rain could cause sections of Kettle River system to swell beyond 2018 levels

Large cruise ships barred from Canadian waters until end of October: Garneau

Last year 140 cruise ships brought more than two million visitors to Canadian ports

Okanagan toddler airlifted to hospital after suffering serious burns

Vernon’s Advanced Life Support paramedic crew was called to the scene in Enderby Thursday afternoon

Most Read