May 25, 2015


Business

Province sees spike in inflation rate

Manitoba’s nation-leading inflation rate kicked into an even higher gear in July, hitting 3.0 per cent in the wake of the one-per-cent hike in the provincial sales tax.

Not only was that the highest annual inflation rate in the country — a dubious distinction Manitoba has held for much of 2013 — it was also more than double the national rate of 1.3 per cent.

And once again, higher gas prices and provincial tax hikes were largely to blame for the latest spike in the province’s consumer price index, which was 2.7 per cent in June and 1.8 per cent in May.

"Manitoba posted larger year-over-year price increases for gasoline, for passenger vehicle registration fees and for cigarettes compared with the national average," Statistics Canada said.

It also noted the provincial sales tax (PST) rose from seven per cent to eight per cent on July 1.

Prince Edward Island had the second-highest inflation rate in July, at 2.3 per cent, while British Columbia boasted a rate of zero.

Nationally, the uptick in Canada’s annual inflation rate — it was 1.2 per cent in June — was almost all due to an increase in the price of gasoline. But it still remained tame and below expectations.

The modest gain in July, following sizable jumps of 0.3 and 0.5 per cent the previous two months, was about half what economists had expected and kept country’s inflation well below the Bank of Canada’s desired target of two per cent.

The little increase there was attributed mostly to a 6.1 per cent jump in gasoline prices, which helped pushed the overall cost of transportation higher.

But food prices, another major component in the inflation calculation, were only 0.8 per cent higher on average in July than they were a year earlier, the smallest gain since June 2010.

Core inflation, the best indicator of structural, underlying price pressures, stayed well anchored at 1.4 per cent, one-tenth of a point higher than in June.

— Staff/Canadian Press

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