Canadian inflation up in March

Energy costs continue to drive higher prices
By Zachary Pedersen
||Last Updated: 04/19/2011

Consumer costs in March were 3.3 per cent higher than in March 2010, continuing an increase of 2.2 per cent year-over-year in February, Statistics Canada reports.

On a monthly basis, March prices were 1.1 per cent above February 2011.

Once again, energy costs have been the driver of higher prices, increasing 12.8 per cent in the 12 months to March. Gasoline was 18.9 per cent higher over the year in March. Prices for fuel oil and other fuels increased 31.3 per cent, while electricity prices rose 4.3 per cent.

The transportation component saw the largest increase, where prices rose 6.6 per cent in the 12 months to February. This is after a 5.1 per cent increase in January.

Food prices rose 3.3 per cent in the 12 months to March. Prices for fresh vegetables rose 18.6 per cent and the cost of meat rose 5.0 per cent.

Among major components, clothing and footwear increased by 0.9 per cent in the 12 months to March, which was the first year-over-year increase since November 2009. Alcohol and tobacco rose 2.5 per cent.

Advancing at 1.7 per cent, core inflation — or inflation minus the most volatile elements, including energy, some fruits and vegetables, mortgage interest, and tobacco — rose as a result of larger price increases for travel services, clothing, and the purchase of passenger vehicles. In February, core inflation rose 0.9 per cent, which was its lowest point since the Bank of Canada pioneered the concept in 1984.

Consumer prices rose at a faster rate in every province in March, compared to February, year over year. The largest increase in consumer prices was observed in Nova Scotia at 3.9 per cent for the second month in a row. Ontario’s consumer prices rose by 3.6 per cent as a result of a continuing rise in gasoline prices, as well as fresh vegetables and bakery products.

The smallest increases were experienced in Alberta at 2.0 per cent and Prince Edward Island at 2.4 per cent.

In the United States, the rate of inflation stands at 2.7 per cent, with energy and food prices continuing to be the principal source of the increase.

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