Canada Inflation Rate At 2015 Low


Consumer prices in Canada increased 1 percent year-on-year in June of 2017, following a 1.3 percent rise in May and in line with market expectations. It is the lowest inflation rate since October of 2015, mainly due to a 1.4 percent fall in gasoline prices.

Year-on-year, transportation cost rose 0.6 percent, following a 2.2 percent gain in May. This deceleration was led by gasoline prices, which fell 1.4 percent, after increasing 6.8 percent in May. The purchase of passenger vehicles index declined for the first time since February 2015, down 0.2 percent. Meanwhile, passenger vehicle insurance premiums rose 2.1 percent, following a 1.4 percent increase in May.

The shelter index increased 1.6 percent, after rising 1.9 percent in May. Homeowners' replacement costs, which rose 4.1 percent, contributed the most to this price increase. At the same time, prices for natural gas (+10 percent) and fuel oil (+7.8 percent) increased at a slower rate than they did in May, contributing the most to the deceleration in the shelter index. Growth in the rent index (+0.7 percent) rose to a rate not recorded since May 2016, while there was no change in mortgage interest cost for the third month in a row, following 31 months of declines.

Household operations, furnishings and equipment costs rose 0.2 percent, matching the increase in May. The telephone services index was up 2 percent, following a 1.1 percent rise in May. At the same time, prices for household appliances declined 3.3 percent, after falling 2.1 percent in May.

The food index rose 0.6 percent, after posting declines for eight consecutive months. Prices for food purchased from stores decreased 0.3 percent, after dropping 1.2 percent in May. Declines in the meat and bakery products indexes moderated, while the fresh vegetables index increased at a faster pace in June than in May. Prices for cereal products fell 3.7% percent, following a 2.7 percent decline in May. Prices for food purchased from restaurants registered a 2.5 percent gain.

On a monthly basis, consumer prices edged down 0.1 percent, following a 0.1 percent gain in May.

The core index rose went up 0.1 percent on the month and rose 0.9 percent on the year, the same as in May. It is the lowest annual core inflation since February of 2011.

Statistics Canada | Joana Taborda | joana.taborda@tradingeconomics.com
7/21/2017 12:45:56 PM