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

VALLEY SENIORS: Port Alberni group provides support for stroke survivors

The Stroke Recovery Foundation of BC has assisted thousands of stroke survivors and their families

North Island College entices international students to Alberni’s ECCE program

Port Alberni had seven international students in January 2019

Port Alberni’s bylaw department shifts from reactive to proactive

8.5 times more files being completed by bylaw officers

Port Alberni’s West Coast Rangers hold rendezvous

Three-day event featured historical re-enactment

Port Alberni Port Authority talks logistics for cruise ship visit

Some restrictions for pedestrians, boaters will be in place

REPLAY: The best videos from across B.C. this week

In case you missed it, here’s a look at the replay-worth highlights from this week in the province

UN urges Canada to take more vulnerable Mexican migrants from Central America

The request comes as the United States takes a harder line on its Mexican border

Mistrial declared in Jamie Bacon murder plot trial

Bacon was on trial for counselling to commit the murder of Person X

B.C. VIEWS: Money-laundering melodrama made for TV

Public inquiry staged to point fingers before 2021 election

Canadian homebuyers escaping high housing costs by moving to secondary cities

In British Columbia, exurbs have grown in the Hope Valley and Kamloops

Feds lay out proposed new rules for voice, video recorders in locomotives

Transport Canada wants to limit use of recorders to if a crew’s actions led to a crash

Raptors beat Bucks 100-94 to advance to franchise’s first-ever NBA Finals

Leonard has 27 points, 17 boards to lead Toronto past Milwaukee

Third person charged in death of B.C. teen found in torched SUV

Inderdeep Kaur Deo facing charge of accessory after the fact to murder

Kamloops girl, 9, recovering from carbon monoxide poisoning now out of ICU

Her mother who was sleeping in the same tent with her did not survive

Most Read