A gas pump is shown at a filling station in Montreal on April 12, 2017. File photo by THE CANADIAN PRESS

Canadian inflation rises in April gas prices strengthen from carbon pricing

OTTAWA — 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.

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.

Just Posted

Trudeau’s cabinet choices have domino effect on House of Commons work

OTTAWA — As Prime Minister Justin Trudeau settles on his choices for… Continue reading

Protesters say Alberta bill would make it harder to access some medical services

EDMONTON — Opponents of a private member’s bill that calls for more… Continue reading

Freeland’s imprint of foreign affairs remains even if she’s shuffled: analysts

OTTAWA — Whether or not Prime Minister Justin Trudeau shuffles her to… Continue reading

Saskatchewan government considers funding first supervised consumption site

SASKATOON — Saskatchewan’s health minister says the government will consider whether to… Continue reading

Thousands fill City Hall Park for Red Deer Lights the Night

With the flip of a switch, downtown Red Deer was filled with… Continue reading

Central Albertans help families during holidays with Christmas Wish Breakfast

It takes a community to help a community. And Sunday morning at… Continue reading

Your community calendar

Nov. 19 The Mountview Sunnybrook Community Association will hold its AGM at… Continue reading

‘Ford v Ferrari’ speeds to No. 1; ‘Charlie’s Angels’ fizzles

NEW YORK — “Ford v Ferrari” put its competition in the rearview,… Continue reading

Teen with cancer whose viral video urged Canadians to vote has died, uncle tweets

WINNIPEG — A terminally ill cancer patient who recorded a video from… Continue reading

Five things to watch for when Trudeau shuffles his cabinet this week

OTTAWA — Prime Minister Justin Trudeau is set to unveil his new… Continue reading

Closing arguments begin in B.C. case launched in 2009 over private health care

VANCOUVER — A framed iconic photo in Dr. Brian Day’s office shows… Continue reading

Rowing Canada, university investigate celebrated coach for harassment, abuse

VANCOUVER — Lily Copeland felt she had found her purpose in life… Continue reading

MacKinnon scores OT winner, Avs recover from blowing late lead to beat Canucks

VANCOUVER — Nathan MacKinnon scored his second goal of the game 27… Continue reading

White House urgently ramps up push for drug cost legislation

WASHINGTON — The White House is ramping up its push to get… Continue reading

Most Read