Canada's Inflation Rises 2.2% in February


Canada's inflation rate rose 2.2% in the 12 months to February, following the 2.3% increase posted in January.

Energy prices rose 10.6% during the 12 months to February, after posting a 9.0% increase the previous month. Gasoline prices continued to increase in February, rising 15.7%, after recording a 13.0% increase in the 12 months to January.

Excluding gasoline, the Consumer Price Index (CPI) rose 1.6% in the 12 months to February, compared with a 1.8% increase in January.

On a seasonally adjusted monthly basis, consumer prices held steady from January to February, after a period of seven consecutive monthly increases. The transportation index, which includes gasoline, increased 0.2% in February, a slower rate of growth than the 1.0% increase observed in the previous month. The food index rose 0.2% in February, following a 0.4% increase in January. The clothing and footwear index posted a decline of 0.1%, after falling 1.2% in January.

On a year-over-year basis, prices increased in six of the eight major components of the CPI in the 12 months to February.
In addition to higher gasoline prices in the 12 months to February, consumers paid 4.0% more in passenger vehicle insurance premiums. They also paid more for air transportation but less for the purchase of passenger vehicles.

Shelter costs rose 2.2% in February, matching the increase in January. Homeowners' replacement cost increased 3.5% in the 12 months to February. Consumers paid more for electricity as well as for fuel oil and other fuels.

However, the mortgage interest cost index, which measures the change in the interest portion of payments on outstanding mortgage debt, continued to decrease. Consumers also paid less for natural gas.

Food prices went up 2.1% in the 12 months to February, identical to the increase in January. Food purchased from stores increased 2.0% in February. Prices rose for bread, unsweetened rolls and buns as well as for confectionery. Consumers paid 2.6% more for food purchased from restaurants.

Prices for household operations, furnishings and equipment increased 1.7% between February 2010 and February 2011. Within this component, higher prices were recorded for several items, notably for child care, domestic services and Internet access.

Prices for health and personal care advanced 2.0% in February, on the heels of a 1.8% rise in January. Consumers paid more for dental care and non-prescribed medicines, while prices for prescribed medicines fell.

For clothing and footwear, prices declined 2.0% in February, following a 2.4% decrease in January. Consumers paid less for women's clothing and children's clothing.

The recreation, education and reading price index decreased 0.3% in the 12 months to February, after increasing 1.6% in the previous month. Traveller accommodation was among the main contributors to this decrease. In February 2010, when Vancouver was hosting the Winter Olympics, prices for hotel rooms were much higher than they were in the same month this year. Consumers also paid less for travel tours in February 2011 compared with February 2010.

The largest increase occurred in the transportation component, where prices rose 5.1% in the 12 months to February, after a 4.8% increase in January.

The Bank of Canada's core index advanced 0.9% in the 12 months to February, following a 1.4% rise in January.

The seasonally adjusted monthly core index fell 0.1% in February, following a 0.1% increase the previous month.


TradingEconomics.com, Statistics Canada
3/18/2011 11:14:58 AM