A surge in gasoline prices pushed Canada's inflation up in January 2017.

A surge in gasoline prices pushed Canada's inflation up in January 2017.
Photo Credit: Elise Amendola/The Associated Press

Higher gas prices fuel January inflation surge

Share

Higher gasoline prices helped push Canada’s annual inflation in January to 2.1 per cent, well beyond the 1.6 per cent increase most economists were expecting.

Gas prices went up by 20.6 per across the country compared to the year before, increasing transportation costs, the main contributor to the higher inflation rate, by 6.3 per cent, Statistics Canada reported Friday.

Shelter costs rose by 2.4 per cent, largely driven by higher prices for natural gas and fuel oil for heating.

Nick Exarhos, a senior economist at CIBC, said although oil prices are expected to stabilize around current levels for this year, that should be enough to keep energy as a significant positive contributor to headline inflation in the coming year.

However, that’s unlikely to change the Bank of Canada’s interest rate policy in the near future, Exarhos said.

“For the Bank of Canada, however, the focus will continue to be on the output gap, and notwithstanding strong employment growth, a soft trend in hours worked suggests that there’s still ample slack in the Canadian economy,” Exarhos wrote in his analysis of the latest Statistics Canada numbers. “As such, don’t look for the Bank of Canada to change its tune—or its stance in monetary policy—anytime soon.”

Cheaper food

Of the eight parts of the consumer economy that Statistics Canada tracks, only one got cheaper: consumers paid 2.1 per cent less for food in January than they did a year earlier, the fourth consecutive monthly decline.

The food purchased from stores index decreased 4 per cent year over year. The prices of fresh vegetables declined by 15.5 per cent, fresh fruit by 10.8 per cent and meat by 1.7 per cent.

However, prices for food purchased from restaurants were up 2.3 per cent year over year in January, matching the gain in December, the data agency reported.

The report also found that year-over-year inflation rates were higher in every province last month compared to a year earlier.

In Alberta, the annual inflation rate hit 2.5 per cent last month after an increase of one per cent in December. Gas prices in Alberta climbed 33.9 per cent last month, a gain that Statistics Canada says was partly attributable to a new carbon levy in the province.

The agency said Ontario, which introduced a cap-and-trade program in January, saw a 20.4 per cent year-over-year increase last month in gas prices.

With files from The Canadian Press

Share
Tagged with: , ,
Posted in Economy

Do you want to report an error or a typo? Click here!

@*@ Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

 characters available

Note: By submitting your comments, you acknowledge that Radio Canada International has the right to reproduce, broadcast and publicize those comments or any part thereof in any manner whatsoever. Radio Canada International does not endorse any of the views posted. Your comments will be pre-moderated and published if they meet netiquette guidelines.

Netiquette »

When you express your personal opinion in an online forum, you must be as courteous as if you were speaking with someone face-to-face. Insults and personal attacks will not be tolerated. To disagree with an opinion, an idea or an event is one thing, but to show disrespect for other people is quite another. Great minds don’t always think alike—and that’s precisely what makes online dialogue so interesting and valuable.

Netiquette is the set of rules of conduct governing how you should behave when communicating via the Internet. Before you post a message to a blog or forum, it’s important to read and understand these rules. Otherwise, you may be banned from posting.

  1. RCInet.ca’s online forums are not anonymous. Users must register, and give their full name and place of residence, which are displayed alongside each of their comments. RCInet.ca reserves the right not to publish comments if there is any doubt as to the identity of their author.
  2. Assuming the identity of another person with intent to mislead or cause harm is a serious infraction that may result in the offender being banned.
  3. RCInet.ca’s online forums are open to everyone, without regard to age, ethnic origin, religion, gender or sexual orientation.
  4. Comments that are defamatory, hateful, racist, xenophobic, sexist, or that disparage an ethnic origin, religious affiliation or age group will not be published.
  5. In online speak, writing in ALL CAPS is considered yelling, and may be interpreted as aggressive behaviour, which is unpleasant for the people reading. Any message containing one or more words in all caps (except for initialisms and acronyms) will be rejected, as will any message containing one or more words in bold, italic or underlined characters.
  6. Use of vulgar, obscene or objectionable language is prohibited. Forums are public places and your comments could offend some users. People who use inappropriate language will be banned.
  7. Mutual respect is essential among users. Insulting, threatening or harassing another user is prohibited. You can express your disagreement with an idea without attacking anyone.
  8. Exchanging arguments and opposing views is a key component of healthy debate, but it should not turn into a dialogue or private discussion between two users who address each other without regard for the other participants. Messages of this type will not be posted.
  9. Radio Canada International publishes contents in five languages. The language used in the forums has to be the same as the contents we publish. The usage of other languages, with the exception of some words, is forbidden. Messages that are off-topic will not be published.
  10. Making repetitive posts disrupts the flow of discussions and will not be tolerated.
  11. Adding images or any other type of file to comments is forbidden. Including hyperlinks to other websites is allowed, as long as they comply with netiquette. Radio Canada International  is in no way responsible for the content of such sites, however.
  12. Copying and pasting text written by someone else, even if you credit the author, is unacceptable if that text makes up the majority of your comment.
  13. Posting any type of advertising or call to action, in any form, to Radio Canada International  forums is prohibited.
  14. All comments and other types of content are moderated before publication. Radio Canada International  reserves the right to refuse any comment for publication.
  15. Radio Canada International  reserves the right to close a forum at any time, without notice.
  16. Radio Canada International  reserves the right to amend this code of conduct (netiquette) at any time, without notice.
  17. By participating in its online forums, you allow Radio Canada International to publish your comments on the web for an indefinite time. This also implies that these messages will be indexed by Internet search engines.
  18. Radio Canada International has no obligation to remove your messages from the web if one day you request it. We invite you to carefully consider your comments and the consequences of their posting.

*