The annual inflation rate in Alberta was the highest of any province in the country in July, according to Statistics Canada.
On Friday, the federal agency reported that the province’s Consumer Price Index (CPI) rose by 3.5 per cent during the month.
Alberta also experienced the second highest rate of inflation on a monthly basis at 0.8 per cent – second only to British Columbia’s province-leading 0.9 per cent.
In Canada, the CPI rose 3.0 per cent on a year-over-year basis.
“While continued strength in energy prices contributed most to the year-over-year increase, higher prices for various services, including air transportation and travel tours, also contributed to consumer price growth in July.
“The Bank of Canada’s preferred measures of core inflation remained stable in July,” said StatsCan.
“Energy costs were 14.2 per cent higher compared with July 2017, after increasing 12.4 per cent year over year in June. Consumer prices for gasoline (+25.4 per cent) and fuel oil and other fuels (+28.1 per cent) continued to increase on a year-over-year basis, amid rising global prices for crude oil following recent supply disruptions,” said Statistics Canada.
“Consumer prices for transportation rose 8.1 per cent in July, following a 6.6 per cent increase in June. In addition to gasoline, the purchase of passenger vehicles index rose more on a year-over-year basis in July (+2.0 per cent) than it did in June (+1.8 per cent). Prices for passenger vehicle insurance premiums were 3.5 per cent higher compared with July 2017, following rate increases in several provinces.”
In all provinces, prices rose more in July on a year-over-year basis compared with the previous month, it said.
“Headline CPI surged in July, and retaliatory tariffs imposed on some U.S. items at the start of the month can only take part of the blame. The 0.5 per cent gain in NSA (not seasonally adjusted) prices was four ticks ahead of the consensus expectation, and took the annual rate up to 3.0 per cent (the highest since September 2011),” said Andrew Grantham, of CIBC Economics.
“Food prices rose, albeit no more than we had been expecting, while the rise in energy prices (up one per cent) was a little more than we had forecast. However, the main surprise was a well above-trend 0.4 per cent seasonally adjusted rise in ex-food/energy costs, with big rises in air transportation, travel tours and telephone services cited as contributing.
“Some of those will likely prove temporary, and could give back at least part of the strength next month. Somewhat surprisingly, even with the upside surprise to the headline, the BoC’s core measures continued to average exactly two per cent. As such, while today’s figures will likely support the (Canadian dollar) and result in increased speculation that the bank could hike again as early as September, we continue to lean toward October for the next move.”
Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald in various capacities, including 12 years as a senior business writer.
The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.
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