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This article was published 18/7/2014 (1106 days ago), so information in it may no longer be current.
Manitoba’s annual inflation rate dropped to one of the lowest levels in the country — 1.9 per cent — in June, Statistics Canada data shows.
That’s half a percentage point lower than the national inflation rate of 2.4 per cent, and sixth-tenths of a point lower than May’s annual rate of 2.6 per cent.
The improvement left Manitoba tied with Alberta and British Columbia for the second-lowest provincial annual inflation rate. Quebec boasts the lowest, at 1.7 per cent, while Ontario has the highest at 3.0 per cent.
Some of the consumer goods that have dropped in price over the past 12 months in Manitoba include non-alcoholic beverages (down 13.8 per cent), furniture (-8.2 per cent), home entertainment equipment, parts and services (-4.6 per cent), and prescribed medicines (down 3.9 per cent), Statistics Canada said.
Some of the items that saw some of the biggest increases during the same period were natural gas (up 11.8 per cent), internet access services and subscriptions to online content (+11.5 per cent), cigarettes (+5.3 per cent) and property taxes and food purchased from restaurants (both up 4.2 per cent).
Nationally, Canadians continue to pay more for food, gasoline and most other consumer items as the annual inflation rose to a new two-year high in June.
The one-tenth increase in the so-called headline inflation rate was matched by an identical gain in the core reading to 1.8 per cent, very near the Bank of Canada’s two per cent target. The central bank watches core closely because it is a better indicator of underlying price pressures as it does not include volatile items such as energy.
Still, the steady march in prices since October, when Canada’s annual inflation stood at 0.7 per cent, has been more persistent and stronger than the central bank and most economists had envisioned, although the Bank of Canada continues to believe the phenomenon will be short-lived.
Earlier this week, bank governor Stephen Poloz said the surprising strength in inflation has been mostly due to temporary factors, such as the high cost of energy.
But the considerable slack in the economy, low wage gains, and strong competition in the retail sector should work their way through the system to moderate prices going forward, he said. The bank sees inflation dipping below two per cent in the next year or so before returning to target in 2016.
Poloz did make one concession to events — he dropped his warning that a key risk to the economy is low inflation.
June’s gains showed more broad-based pressure on prices. Energy, particularly gasoline and natural gas, continued to be main drivers with year-over-year gains of 5.4 per cent and 19.4 per cent over last June. Both, however, were higher in May and so represented a moderating if still significant influence on inflation.
Overall, the energy index rose 6.7 per cent last month, compared to 8.4 per cent in May.
Meanwhile, food prices are becoming an increasingly important factor, increasing 2.9 per cent in June from 2.3 per cent in May. Food purchased in stores rose even more to 3.2 per cent as consumers paid 9.4 per cent more for meat and 9.5 per cent for fresh vegetables than they did last year at this time.
Government taxes on tobacco continued to exert an influence on the price of cigarettes, which are now 10.3 per cent higher than last June.
Not all items Canadians consume saw price gains, however. Cost for air transportation, digital computing, furniture, video equipment and personal care supplies were lower this June than 12 months earlier.
On monthly basis, prices were 0.1 per cent higher than in May, the agency said.
— Staff/Canadian Press