According to a report released on Tuesday in Ottawa by Statistics Canada, the consumer price index experienced a 4.4% rise in April compared to the same period last year. This marks the first increase in the rate of headline inflation since June 2022.
Last month, Canada’s inflation rate, which had been showing signs of cooling, experienced a reversal and rose to an annual rate of 4.4 percent.
Economists had anticipated that the recently released data by Statistics Canada on Tuesday would indicate a slight decrease in the cost of living, from March’s rate of 4.3 percent, to approximately 4.1 percent.
Contrary to expectations, there has been another increase in prices, including essentials such as gasoline, rent, and mortgages, resulting in a rise in the cost of living during the month. This marks the first instance of accelerated inflation since June 2022 when Canada experienced an inflation rate of 8.1 percent, the highest in over 40 years.
Food prices have been a major concern for Canadian families recently, and although there has been a slight decrease from the peak levels, they remain alarmingly high.In the year leading up to April, grocery prices have risen by 9.1 percent. While this is a slight improvement from March’s rate of 9.7 percent, it still stands at more than double the overall inflation rate.
Gasoline prices are once again on the rise
Gasoline prices, which surged in early 2022 following the Russian invasion of Ukraine, have moderated since their peak a year ago but are once again gradually increasing on a monthly basis.
In April alone, pump prices experienced a substantial rise of 6.3%, marking the largest jump since October of the previous year. While the upward trend in gasoline prices can be attributed to various geopolitical and macroeconomic factors, one contributing factor to the monthly increase was the implementation of a higher federal carbon tax on April 1. The tax hike amounted to $65 per tonne of emissions, resulting in an additional three cents per litre in gasoline costs and bringing the total increment to approximately 14 cents per litre.
Based on government data, the average retail price for a litre of gasoline in April surpassed $1.60. This figure represents an increase from $1.50 in March but remains significantly below the peak recorded in June 2022 when prices reached $2.07 per litre. Comparatively, it is also lower than the price of $1.74 per litre during the same period last year.