Inflation slows sharply to 1.7% in April as consumer carbon price ends

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OTTAWA — The end of the consumer carbon price at the start of April drove inflation down sharply, Statistics Canada said Tuesday, but there were signs of pressure building at the grocery store.

The annual pace of inflation cooled to 1.7 per cent last month, down from 2.3 per cent in March, the agency said. That’s a little higher than the 1.6 per cent expected by a poll of economists.

Canadians were primarily finding relief at the gas pumps in April.

Statistics Canada said gas prices fell 18.1 per cent year-over-year in April, thanks mostly to the end of the carbon price, but also because global oil prices fell amid declining demand and higher production from OPEC countries. Natural gas prices also fell 14.1 per cent annually in the month.

Excluding energy from the consumer price index, StatCan said inflation would have come in at 2.9 per cent for April — an increase from 2.5 per cent for the same calculation in March.

The only province that didn’t experience a slowdown in inflation last month was Quebec, a province that has its own cap-and-trade system and therefore didn’t benefit from the end of the federal carbon price regime.

But while consumers found it cheaper to gas up in April, pressure was building at the grocery store.

Prices for food bought from the store rose 3.8 per cent last month, StatCan said, accelerating from 3.2 per cent in March.

On an annual basis, prices for fresh vegetables rose 3.7 per cent, the cost of fresh and frozen beef was up 16.2 per cent and prices of coffee and tea rose 13.4 per cent, the agency said.

Grocery store inflation has now outpaced the overall consumer price index for three months in a row.

Canadian travellers also felt the pinch as travel tour prices rose 3.7 per cent monthly in April, reversing course after a decline of eight per cent in March.

The April inflation figures come a little more than two weeks before the Bank of Canada is set to make its next interest rate decision on June 4.

The central bank held its policy rate steady at 2.75 per cent at its decision in April, saying then that it needed more time to see how Canada’s trade war with the United States was impacting the economy.

Here’s a list of April inflation rates for Canadian provinces

— Newfoundland and Labrador: 0.4 per cent (1.1)

— Prince Edward Island: 0.6 per cent (1.8)

— Nova Scotia: 1.3 per cent (2.3)

— New Brunswick: 0.2 per cent (1.9)

— Quebec: 2.2 per cent (1.9)

— Ontario: 1.6 per cent (2.3)

— Manitoba: 2.1 per cent (3.0)

— Saskatchewan: 1.9 per cent (2.5)

— Alberta: 1.5 per cent (2.8)

— British Columbia: 2.0 per cent (2.6)