Inflation in Canada rose to 6.7 percent in March, much more than economists had expected, and a full percentage point higher than its 30-year high in February.
The Statistical Office of Canada said on Wednesday that all eight categories of the economy tracked by the data agency have grown, from food and energy to accommodation and transportation costs.
“The rise in prices in March is the largest monthly increase since January 1991, when the tax on goods and services was introduced,” said economist Royce Mendes of the Desjardins Group.
While the price of almost everything is growing rapidly, transportation costs are leading, rising 11.2% in the last year. A major reason for this increase is the 39.8% increase in petrol costs since March last year.
Gasoline prices rose in March, largely due to Russia’s invasion of Ukraine, which plunged global supplies into chaos. Although they have fallen slightly since then, at one point last month many Canadian cities saw their average price per liter of petrol reach $ 2 for the first time.
High gas prices have a huge impact on headline inflation, as delivery and transport costs add to the cost of everything else, from food bills (up to 8.7%) to the price of durable goods such as furniture (up 13, 7%) and even plane tickets (by 8.3 percent)
Services are also more expensive
Although the cost of everything to be transported is rising, the services sector is not immune to current inflationary pressures.
The total price of services increased by 4.3% last year compared to 3.8% in February. As TD Bank economist Leslie Preston noted, the main factor was not pump prices; this was the alleviation of COVID-related health restrictions, which increased the demand for close contact services such as restaurant dining and other personal events.
“Pressure on prices in other areas of the economy shows more warmth for both goods and services,” she said. “Inflation is likely to remain above the Bank of Canada’s target range until 2023, which will reduce consumer purchasing power and lead to higher interest rates.
Few things get cheaper
While most goods and services have become more expensive, some things have become cheaper, though not enough to offset the rise elsewhere.
These include a 5.4% reduction in the cost of servicing a mortgage, a 6.2% reduction in the cost of car insurance, a 2.5% reduction in the cost of telephone bills and a large 28% reduction in the cost of car registration fees.
The biggest reason for this decline was the decision of the Ontario government to abolish the vehicle registration tax, according to Canadian statistics.
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