Canada's inflation rate up in April

Inflation rises in April as carbon taxes drive up gas prices

Inflation rises in April - Business News

Statistics Canada's offices at Tunny's Pasture in Ottawa are shown on Friday, March 8, 2019.

Canada's inflation rate edged up to 2 percent on a year-over-year basis in April from 1.9 percent in March, according to Statistics Canada on Wednesday.

Stronger price pressures from gasoline helped picked up the pace of annual inflation last month in Canada, with an April reading of two per cent, compared to 1.9 per cent in March and 1.5 per cent in February. The move brought it in line with the Bank of Canada's ideal two per cent target.

Prime Minister Justin Trudeau slapped a carbon tax on four provinces in April because they had not followed federal guidelines to create their own carbon pricing plan.

The federal Liberal government imposed carbon levies last month on New Brunswick, Ontario, Manitoba and Saskatchewan because they did not have similar systems of their own. The federal move has caused controversy, and provincial governments have vowed to fight the mandated systems.

She added that the levies were one of several factors that put upward pressure on pump prices.

Carbon tax bumps up gas prices in 4 provinces - will it change consumer behaviour?

Higher year-over-year costs for mortgage interest and rents, passenger vehicles and auto insurance premiums, as well as for fresh vegetables, were partially offset by lower rates for travel accommodations, gasoline, telephone services, computer equipment and children's clothing, the agency said.

Excluding gasoline, the inflation rate rose 2.3 per cent compared to a year earlier. "There's nothing for markets to really chew on today, with the date essentially bang on expectations, and with the headline figure only a tick higher than the prior month and showing no obvious trend". The annual rate rose to the Bank of Canada's 2.0 per cent target for the first time since December.

"The Bank of Canada has aspirations for raising rates further, but the global economy is going to get in the way of that", said Doug Porter, chief economist at BMO Capital Markets.

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