OTTAWA — Canada’s annual inflation rate fell to the lowest level in almost 15 years last month as the impact of last year’s sharp spike in gasoline prices continue to push overall consumer prices toward negative territory.
Statistics Canada said prices overall fell in April by 0.1 per cent on a month-to-month basis — 0.3 per cent on a seasonally adjusted basis — pushing the inflation rate to 0.4 per cent.
This the lowest rate on inflation since December 1994 and represents a sharp drop from the 1.2 per cent rate recorded in March.
As has been the case for months, energy prices are the main reason inflation is headed toward negative territory, possibly as early as next month.
As it is, four provinces already have a negative inflation rate — Prince Edward Island, Nova Scotia, New Brunswick and Alberta.
The price for oil and other fuels declined 33.5 per cent in April from last year, while the price for gasoline dropped 24.7 per cent, a reflection of last spring’s rise in crude oil prices.
The decrease pushed prices down on a number of other components, including transportation, which fell by eight per cent, and shelter costs, mitigated by the 17.5 per cent decline in natural gas.
The cost of purchasing or leasing a passenger vehicle also dropped, by 8.3 per cent from a year ago.
If energy costs were not included, Canada’s inflation rate would stand at 2.4 per cent, Statistics Canada said.
While most major components of the index remained on the positive side, food was the main driver of inflation in April.
The agency said food prices rose 7.1 per cent in April, a slightly lower rate than the 7.9 per cent from March.
But there were some outsized gains, including a 26 per cent increase in fresh vegetables, a 16.8 per cent hike in fresh fruit, and a nine per cent rise in both beef and chicken. Potatoes spiked 43.3 per cent higher as a result of recent poor harvests.
Other inflation drivers were mortgage interest costs, which rose 3.2 per cent, although that was lower than the 4.2 rise posted the previous month.
The Bank of Canada has forecast that inflation will dip into the negative territory during the current second quarter of the year, but it is unlikely April’s data will arouse concern of deflation setting in for the bank.
Although inflation is falling like a stone, the phenomenon remains a one-item wonder — energy — with most other prices remaining stable or showing slight increases.
Core inflation, which the central bank looks at for underlying trends, remains close to the target two-per-cent range, at 1.8 per cent.
Regionally, the agency said consumer prices slowed in all provinces in April, with the largest slowdowns coming in Alberta, Ontario and Saskatchewan.