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

Man sentenced for setting apartment barbecue on fire in Abbotsford

Michael Rodden climbed to second-storey balcony in March 2019

How do you hold a public hearing when public gatherings are banned?

City of Abbotsford discussing how to hold hearings with appropriate social distancing

Abbotsford golf courses remain open during COVID-19 pandemic

Ledgeview, Fraserglen and Valley Golf institute safety policies to fight coronavirus

120 more recreation staff laid off by City of Abbotsford

Job cuts from closure of public facilities, city will re-hire after health emergency passes

400 people assessed for COVID-19 at Abbotsford centre

Website and centre have been running for over a week

Trudeau announces 75% wage subsidy for small businesses amid COVID-19

This is up from the previously announced 10 per cent wage subsidy

Morning world update: Cases surge past 600,000; positive news in Germany

Spain suffers its deadliest day as Germany considers April 20 to possibly loosen restrictions

67 more B.C. COVID-19 cases, two more deaths in Vancouver region

Positive tests found in Surrey, Langley long-term care facilities

VIDEO: Penguins roam empty halls of Vancouver Aquarium

COVID-19 has forced the Vancouver Aquarium to close access to guests – leaving room for its residents

Kids get back to learning in B.C., online

Ministry of Education rolls out new tool for school

Nanaimo couple caught aboard cruise ship with four dead and COVID-19 present

Four ‘older guests’ have died on Holland America’s Zaandam; cruise line confirms two COVID-19 cases

‘Now is not the time to bag that peak’: BCSAR manager discourages risky outdoor adventures

Call volumes are not going down, even as the COVID-19 pandemic persists

Food Banks BC already seeing surge in demand due to COVID-19 pandemic

Executive director Laura Lansink said they expect applications will keep increasing

BC Hockey, Vancouver Canucks encourage stick tapping to honour frontline health care workers

Families are encouraged to video themselves tapping their sticks at 7 p.m. and post to social media

Most Read