Winnipeg Free Press - PRINT EDITION

Lower prices help ease Manitoba's inflation rate

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Manitoba consumers finally got a break last month on the inflation front.

Statistics Canada said Friday Manitoba's annual inflation rate fell to 2.7 per cent in August after hitting its highest level in nearly two years in July, when it reached 3.0 per cent.

The inflation rate here had been climbing steadily for much of 2013, after starting the year at a tame 1.2 per cent. And even with August's dip, it was still the highest annual rate in the country and more than double Canada's annual rate of 1.1 per cent.

Some of the big contributors to the rising cost of living in Manitoba have been higher gasoline prices and increases in a number of provincial taxes and fees.

The latter included the recent one-percentage-point hike in the provincial sales tax, which was bumped to eight per cent on July 1, and 2012's decision to extend the PST to include a number of items that previously had been exempt from the tax.

Friday's Statistics Canada figures show some of the consumer items in Manitoba that were cheaper last month than in August 2012 were prescribed medicines (down 8.8 per cent), household appliances (-4.6 per cent) and personal care supplies and equipment (-4.2 per cent).

Some of the items that saw the biggest increase in prices in the past year were passenger vehicle registration fees (29.4 per cent), cigarettes (10.5 per cent), electricity (6.7 per cent) and gasoline (6.2 per cent).

Statistics Canada said the national annual inflation rate slowed to 1.1 per cent in August due to smaller increases for housing and gas prices than in the previous month. The August rate was in line with economists' estimates and was down from 1.3 per cent in July.

Bank of Montreal senior economist Benjamin Reitzes said inflation remains very tame with no signs of a looming pickup.

"Persistent economic slack and lacklustre global growth will likely keep price pressures contained at least well into next year," Reitzes said.

"There's nothing here to push the Bank of Canada off the sidelines any time soon."

The Bank of Canada's core inflation index rose 1.3 per cent for August compared with 1.4 per cent in July, at the low end of the central bank's target range of between one and three per cent.

Statistics Canada said shelter costs in August were up 1.1 per cent from a year earlier as Canadians paid more for rent and natural gas, offset by lower mortgage interest costs compared with last year.

 

-- The Canadian Press / staff

Republished from the Winnipeg Free Press print edition September 21, 2013 B9

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