Canadian inflation rises in April; gas prices strengthen from carbon pricing

Andy Blatchford, The Canadian Press
Published Wednesday, May 15, 2019 8:38AM EDT
Last Updated Wednesday, May 15, 2019 10:12AM EDT

OTTAWA -- Canada's annual inflation rate picked up its pace in April -- a month that saw stronger price pressures from gasoline in provinces that have 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.

Economists on average had expected an increase of 2.0 per cent for April, according to Thomson Reuters Eikon.

The April reading brought the measure in line with the Bank of Canada's ideal inflation target of two per cent -- a neutral position that's unlikely to put immediate pressure on governor Stephen Poloz to move his trend-setting interest rate in either direction.

Consumers paid more for mortgage borrowing costs, fresh vegetables and autos last month, while they saw lower price tags for hotels, kids' clothing and digital equipment.

Gas prices rose month-to-month in April in all provinces. Excluding gasoline, the inflation rate rose 2.3 per cent compared to a year earlier.

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 applied 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.

Last month, Prince Edward Island introduced its own carbon-pricing system and British Columbia increased its existing levy.

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.

Canada's national annual inflation rate was two per cent in April, Statistics Canada says. Here's what happened in the provinces (previous month in brackets):

Newfoundland and Labrador: 1.5 per cent (1.2)
Prince Edward Island: 1.2 (1.0)
Nova Scotia: 1.3 (1.3)
New Brunswick: 1.7 (1.6)
Quebec: 1.8 (1.8)
Ontario: 1.9 (1.8)
Manitoba: 2.3 (2.3)
Saskatchewan: 2.3 (1.8)
Alberta: 2.2 (2.3)
British Columbia: 2.7 (2.6)

The agency also released rates for major cities, but cautioned that figures may have fluctuated widely because they are based on small statistical samples (previous month in brackets):