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

Invasive mussel monitoring stations detect 10 boats

Boats were headed to Okanagan and Thompson regions

Westside wildfire human caused

Blaze started as a house fire and spread to the bush

COVID-19 outbreak at Okanagan Correctional Centre, involves 3 staff

Three staff involved in possible exposure, health officials say

Vernon science centre marks 30th with prehistoric addition

Okanagan Science Centre moves in newest guest, seeking name

Vernon’s Sandy Beach clean up ‘coming along nicely’: OKIB

Okanagan Indian Band provides update on changes at popular beach in Vernon

578 British Columbians currently infected with COVID-19

Seventy-eight new cases confirmed in past 24 hours

Conservation seizes fawn illegally kept captive in Vancouver Island home

A Comox Valley resident charged and fined under the Wildlife Act

Vandals put Vernon public piano out of play

Downtown instrument destroyed, but public project is not over

Pandemic could be driving more parents to get on board with flu shot: study

University of B.C. study gauges willingness for parents to vaccinate children for influenza

Salmon Arm’s first Bitcoin ATM installed in mall

The kiosk will allow people to buy cryptocurrency or sell it for cash.

Summerland mayor asks for community conversation on racism

Incidents in July prompt calls for dialogue

Summerland working to reopen recreation facilities

Arena and pool are opening, but ball season will not proceed

Surrey man found guilty in West Kelowna killing of common-law spouse

Tejwant Danjou was convicted of second-degree murder in the July 2018 death of Rama Gauravarapu in West Kelowna

Watchdog clears Okanagan RCMP in death of man after arrest over alleged stolen pizzas

The man died in hospital after having difficulty breathing and broken ribs

Most Read