Assahafa.com
Canada’s annual inflation rate rose to 2.8 per cent in April, Statistics Canada said on Tuesday, in large part due to soaring prices at the pump.
Energy prices overall rose a whopping 19.2 per cent year-over-year in April, following a 3.9 per cent increase the month before.
Statistics Canada said the cost of gasoline specifically rose even quicker, and was 28.6 per cent higher year-over-year, thanks to the supply crunch in the Strait of Hormuz and because of the switch to the more expensive summer blend of gasoline.
The U.S. and Israel’s war with Iran has shuttered the strait, which has driven prices for energy up worldwide.
The agency noted the federal government’s move to suspend the fuel excise tax mid-month helped moderate the April price increase.
High energy prices were also the driving factor behind March’s inflation rate rise to 2.4 per cent.
Ottawa’s decision to remove the consumer carbon price a year earlier meanwhile skewed the annual price comparison higher in April.
Nixing the carbon price took roughly 18 cents off the cost of a litre of gas in April 2025. While that move took some steam out of the headline inflation rate over the past 12 months, that reduction has now fallen out of the annual comparison — pushing inflation higher rather than depressing it.
Clothing and footwear prices also rose two per cent in April, after falling by 0.4 per cent in March.
CIBC senior economist Andrew Grantham said in a note to clients that higher prices for airfares tied to spiking fuel costs were not captured in the April inflation data, because those transactions are recorded when the flight is taken — not when the ticket is purchased. He said he expects to see those pressures show up more in the summer inflation readings.
Rents continued to climb, but at a lower pace, according to Statistics Canada. Nationally, rents rose by 3.6 per cent year over year — down from 4.2 per cent in March — while the pace of the price of rents in British Columbia didn’t grow at all.
Food inflation also eased to 3.5 per cent in April, down from four per cent in March, as grocery items such as chicken, fresh vegetables, coffee and tea saw their pace of price hikes slow following sharp increases earlier in the year.
And prices for tour travels fell 11 per cent in April, after rising 11.5 per cent the month prior.
BMO chief economist Doug Porter pointed to measures of core inflation, which strip out volatile measures like fuel and food and rose at a far slower pace than overall inflation.
“Looking beyond the nasty business at the gasoline pumps, this report is unambiguously soft,” Porter wrote in a note to investors. “If it weren’t for those bothersome items like filling up your car and paying for groceries, there would be almost no inflation.”
Porter said that rising energy prices might be spurring people to hold onto their money and not buy other things, which could be putting disinflationary pressure on other sectors.
Grantham said that the softness in core inflation could give some breathing room to other sectors, and prevent inflation from rising as much even when the higher cost of gas starts working its way into other industries.
Source: cbc
