The inflation rate across Canada fell to 0.8% year-over-year to April, according to Statistics Canada data released May 22.
This is the lowest rate since October 2013 and follows an increase of 1.2% in the 12 months to March.
Inflation was held back by the cost of transportation as, year-over-year, natural gas prices plunged 14.6%. All other categories saw increases. The price of food and the cost of household operation, furnishings an equipment both increased 3.6%.
In British Columbia, inflation was even lower than the national average, with growth of 0.5%. This was due to an 18.1% drop in the price of natural gas.
The core inflation rate, which doesn’t include such volatile components as natural gas and other fuel, fruits and vegetables and mortgage interest costs, grew 2.3% across the country in the 12 months to April. This rate has remained in the 2.1%-2.4% range for the past nine months.
“At least part of the upward pressure reflects the temporary impact of the weakening in the Canadian dollar on import prices,” said RBC assistant chief economist Dawn Desjardins.
“The Bank of Canada has indicated it intends to look through the opposing impacts of the energy price drop and currency weakening.”
Desjardins said RBC expects the country’s central bank to maintain the overnight rate at 0.75% at next week’s meeting.
