By: Thomas I. Likness
EBC News Service
(Eagle News) — Canada’s inflation rate in March hit 2.2% — double what it was a year earlier, Statistics Canada reported Wednesday.
Higher prices for transportation and shelter led the factors driving the increase.
Gasoline prices rose 35.5%, the largest gain since March 2020. The rise was driven by growing global demand for oil and production cuts by OPEC. Home heating prices rose with natural gas up 14.1% and other fuels 7.7% higher.
Higher costs for building supplies and increased demand for single-family homes pushed up shelter prices 2.4%, year over year. New home prices rose by 7.9%. That was partially offset by lower mortgage interest rates.
Although food prices showed an average of a 1.3% increase, the price of some items soared. Canadians paid 11.4% more for eggs and 2.4% more for dairy products. To put that into context, those prices plummeted last year as demand dropped when restaurants and other food services were locked down.
Beef prices dropped 2.1% from last year because of an increased supply.
Royal Bank of Canada economist Claire Fan expects inflation to continue to accelerate.
“A stronger-than-expected rebound in household spending may collide with capacity constraints to propel prices higher” Fan wrote in an analysis. “We see that as a risk for later in 2021, contingent on the healthy reopening of the economy.”
(Eagle News Service)