Canada Inflation Rate Steady At 1.6% In April


Consumer prices in Canada increased 1.6 percent year-on-year in April of 2017, the same as in the previous month and below expectations of 1.7 percent. Prices of energy, transportation and shelter showed the highest upward pressure while food cost continued to decline although at a slower pace.

Year-on-year, transportation cost rose 4.2 percent, after increasing 4.6 percent in March. This deceleration was led by the purchase of passenger vehicles index. Gasoline prices posted a 15.9 percent  increase, slightly larger than the 15.2 percent rise registered in March. 

Shelter costs went up 2.2 percent, matching the increases in February and March. The homeowners' replacement cost index (+3.9 percent) was the main upward contributor, despite slowing growth since November 2016. Prices for natural gas (+15.2 percent,) rose for the fourth consecutive month. Conversely, electricity prices posted their fourth consecutive decline, down 1.3 percent.

The recreation, education and reading index grew 3.3 percent, following a 3.6 percent, increase in March. The travel tours index added 9.4 percent,, contributing the most to the rise. Traveller accommodation costs were up 5.7 percent after rising 1.4 percent. At the same time, the video equipment index fell 8.8 percent. Prices for video and audio subscription services rose less in the year to April than in the 12-months to March.

The household operations, furnishings and equipment index rose 0.5 percent following no change in March. This acceleration was mainly attributable to a 3.8 percent, month-over-month rise in the prices of telephone services, as new product introductions affected the price of service plans.

The food index declined 1.1 percent, following a 1.9 percent drop in March and marking the seventh month of falling food cost.

On a monthly basis, consumer prices went up 0.4 percent, above 0.2 percent in March. Gasoline prices jumped 9.5 percent, partly due to supply disruptions at oil refineries, as they changed over to summer fuel blends.

The core index rose was unchanged on the month and rose 1.1 percent on the year, below 1.3 percent in March. It is the lowest annual core inflation since November of 2013.


Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com
5/19/2017 12:46:00 PM