A deeper than expected dive in airfare prices and falling tuition costs were partially responsible for keeping Canada’s inflation rate steady at 1.9 per cent in September, Statistics Canada reported Wednesday.
Statistics Canada’s latest consumer price index report shows that the rate of price growth was also held back by lower gas prices.
Statistics Canada said a 10 per cent drop in gasoline prices compared with last year continued to weigh on the overall inflation rate. Gas prices, year-over-year, were down 10.2 per cent in August and 6.9 per cent in July.
Excluding pump prices, the inflation reading for September was 2.4 per cent for a third-straight month.
For the first time in over 45 years, the tuition fees index declined by 3.6 per cent in September. The decline in the cost of tuition was due to a 8.9 per cent tuition cut enacted by the Ontario government for the 2019/2020 academic year.
The purchase of passenger vehicles index saw continued strength in September, up 3.4 per cent from the same month a year earlier.
Canadians did, however, pay more for mortgage interest costs, vehicle insurance and auto purchases last month compared to the previous year.
Nathan Janzen, senior economist with RBC Economics, said stable underlying price-growth trends leave room for monetary policy flexibility.
“The lack of upward inflation pressure gives the Bank of Canada room to respond with lower interest rates if needed, while the absence of downward pressure also means there’s no need to rush to make that decision,” Janzen wrote in a note to clients.
With files from The Canadian Press