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

Langley Township prepares for high water

The Fraser River is cresting soon and levels are relatively high

Two more COVID-19 cases reported by Langley Lodge

One resident, one staffer have tested positive for the coronavirus

Car failing to yield at new stop sign causes three-car crash and flaming aftermath

A Monday afternoon multiple-car collision saw no serious injuries reported to police

Cost of COVID-19 ‘biggest unknown’ for Langley School District budget

District’s 2020/2021 annual budget bylaw sent to a third reading during board meeting

VIDEO: A Vancouver Island black bear takes weekend nap in eagle tree

Videos captured by Terry Eissfeldt shows the bear arriving Saturday night and sleeping in on Sunday

Facing changes together: Your community, your journalists

Thanks for helping the Langley Advance Times to continue its mission to provide trusted local news

George Floyd asphyxiated by sustained pressure: family autopsy

Death sparked a wave of protests across the U.S. and abroad

Suspect sought in alleged assault, hate crime on Metro Vancouver bus: transit police

The woman then allegedly punched the teenager in the head multiple times

COVID-19: B.C. commercial landlords can’t evict if they decline rent assistance

Emergency order ‘incentive’ for federal program, Carole James says

B.C. Hockey League prepping for 2020-21

League reviewing different scenarios and start times in compliance with provincial regulations

Investigators probe death of CN employee at Surrey rail yard

Transportation Safety Board is investigating an ‘occurrence that took place during switching operations’

Abbotsford International Airshow opening 50-year-old time capsule

Bronze time capsule was put together to commemorate AIA as Canada’s National Airshow

Most Read