Manitoba again has lowest inflation growth

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This article was published 20/02/2024 (612 days ago), so information in it may no longer be current.

Manitobans may feel slightly less pressure on their wallets this month as the inflation rate slows to the lowest of any province for the second consecutive month.

Statistics Canada released its latest inflation data Tuesday, which shows a decline in the consumer price index of 0.5 percentage points nationally, to 2.9 per cent, compared to 12 months ago.

In Manitoba, the inflation rate dropped 0.9 percentage points to 0.8 per cent, compared to 1.7 per cent last year.

The largest contributor to the decrease was lower year-over-year gasoline prices, Statistics Canada said.

It partly attributed the national decline to lower gas prices in Manitoba, which relates to the provincial government’s temporary suspension of the 14-cent per litre gas tax on Jan. 1.

Premier Wab Kinew was quick to credit his government for easing the financial crunch.

“Our government was proud to cut the provincial gas tax on the first day of the year,” Kinew said.

“It’s direct help to Manitobans who have been struggling with inflation and struggling with higher costs.”

Statistics Canada said the province’s gas prices dropped 14.1 per cent year-over-year in January. Nationally, gas prices fell four per cent.

The six-month gas-tax holiday is expected to cost the provincial treasury $164 million. The NDP government will consider extending it by six months if inflation and interest rates remain high.

Kinew touted the “economy-wide benefits” of the gas tax holiday for all Canadians and said the cut “directly contributed to a 0.4 per cent decrease to inflation,” citing Statistics Canada.

However, the government later clarified the premier’s statement, saying the impact of the gas tax holiday on inflation growth had been determined by the Manitoba Bureau of Statistics and the province’s lead economist.

“Our government is going to continue to take steps to save you and your family money,” Kinew said, referring to the government’s first budget, due this spring.

The premier declined to discuss what decisions are up his government’s sleeve.

Statistics Canada measures inflation using a number of indicators, including the price of food, shelter and transportation.

Prince Edward Island had the second-lowest inflation rate last month, at 1.6 per cent. Quebec had the highest rate of inflation at 3.3 per cent, a decrease from four per cent in December 2023.

January had slower growth in the price of food, clothing, transportation and recreation. Nationally, grocery price growth slowed to 3.9 per cent year-over-year.

Food prices in Manitoba were still up 3.8 per cent year-over-year but growing at a slower rate than in most other jurisdictions.

It comes after food prices increased 10.4 per cent in January 2023 and 6.5 per cent in January 2022.

Kinew said high inflation is contributing to increased food bank use in Manitoba, saying the gas tax holiday is helping in that regard.

However, the premier could not say confidently the benefits of the gas tax holiday are being passed on to consumers through lower grocery prices. Transportation costs have also come down owing to the tax break.

The premier had said he expected grocery store prices would reflect the gas-tax savings.

“We have evidence that the inflation rate across the country has been lowered through the step that our government here in Manitoba has taken,” Kinew said. “That’s a pretty good economic track record.”

Asked if the government is tracking the impact of the gas tax holiday on food prices, Kinew said it’s important for grocers to pass on those savings while the government looks at other policy measures to help families, pointing to the NDP’s plan to introduce a universal school nutrition program this fall.

“Manitobans from all walks of life benefit when we have a lower inflation rate,” Kinew said.

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In a statement, PC finance critic Obby Khan called the gas tax holiday a distraction that will lead to higher prices when it comes to an end.

“The NDP has allowed school taxes to go up, which will put more pressure on Manitoba families struggling to make ends meet,” Khan said, referring to school division budget proposals to hike taxes.

“Instead of standing up to (Prime Minister) Justin Trudeau, the NDP continues to allow the punitive carbon tax to be charged on home heating bills, which will increase yet again on April 1.”

— with files from Gabrielle Piche

danielle.dasilva@freepress.mb.ca