Statistics Canada newly released Consumer Price Index for March 2019 was released Wednesday. It shows that Canada’s Consumer Price Index (CPI) went up by 1.9% on a year-over-year (y-o-y) basis in March. This number is pretty close to economists’ expectations. March’s increase was higher than February’s year-over-year increase of 1.5%. It is also higher than January’s 1.4%, which was a 15-month low.
Report shows Consumer Price Index rise in all major categories
The report shows that prices for all eight major components (food, shelter, household equipment, clothing, transportation, health, recreation, legal recreational substances) increased on a y-o-y basis. However, transportation costs saw the largest y-o-y increase, going from 0.1% to 1.9%.
High gasoline prices were a major driver for inflation last year. Lower gas prices offset that pressure in recent months. But that downward pressure eased off in March as global oil prices climbed again. According to a report by National Bank, gas prices “surged” by 11.6% in March, an amount well above the historical norm. Overall, year-over-year gas prices dropped by 4.4% in March.
Compared to last March, the report shows consumers paid 15.7% more for fresh vegetables, 8.1% more on mortgage borrowing costs and 5.6% more for car insurance. In contrast, internet costs dropped 9.2% and travel tours went down by 6.4%.
The price for durable goods went up by 1.2% in the last 12 months. The drop is primarily led by a 3.0% increase in passenger vehicle prices. Statistics Canada attributes this y-o-y increase primarily to a 1.5% month-over-month decline that took place in March 2018. At that time car manufacturers increased rebates for new vehicles.
Prices for services went up by 2.2% on a y-o-y basis in March, compared to February’s 2.3% increase. Travel accommodation prices declined by 6.5% in the same period, while air transportation costs increased by 2.5%.
CPI regional variations
The Consumer Price Index increased in every province in March, but price inflation was most pronounced in Alberta (+2.3%), New Brunswick (+1.6%) and Prince Edward Island (+1.0%). The main force behind those price increases were higher month-over-month gasoline prices, as well as higher natural gas prices in Alberta.
Alberta’s natural gas prices increased by 22.8% on a year-over-year basis, contributing to a 3.9% increase in shelter costs in the province. But that increase in shelter costs was somewhat offset by slower growth in electricity prices in March (+15.0%) compared to February’s (+19.9%).