Canadian inflation rate slows to 1 in March as gasoline prices drop

OTTAWA — A reversal in the year-to-year fluctuation of gasoline prices took Canada’s annual inflation rate down two-tenths of a point to 1% last month, putting the rate in line with the Bank of Canada’s expectations.[np_storybar title=”March inflation rates by provinces, territories” link=””] Canada’s national inflation rate was 1.0% in March, Statistics Canada says. Here’s what happened in the provinces and territories. (Previous month in brackets): — Newfoundland and Labrador 1.6 (2.3) — Prince Edward Island 1.2 (1.5) — Nova Scotia 1.1 (1.9) — New Brunswick 0.8 (1.5) — Quebec 0.8 (1.4) — Ontario 1.0 (1.2) — Manitoba 2.3 (2.2) — Saskatchewan 1.3 (1.8) — Alberta 1.2 (0.9) — British Columbia 0.5 (0.9) — Whitehorse, Yukon 1.2 (1.8) — Yellowknife, N.W.T., 1.6 (1.9) — Iqaluit, Nunavut 1.2 (1.2) [/np_storybar]The March decline takes some of the volatility out of the measure following February’s surprising 0.7 percentage point jump to 1.2%, confirming widely-held views that Canada remains in a tepid inflation environment.The key contributor to March’s lower rate was a 0.3% decline in the price of gasoline from a year ago, following February’s 3.9% increase. Statistics Canada said gasoline prices declined in seven of the 10 provinces.Six of the eight major components that go into the inflation rate rose, but all by less than 2%. As a result, core inflation, which excludes volatile items such as gasoline and fresh fruit, also remained in check, staying unchanged at 1.4%.In a new economic outlook released Wednesday, the Bank of Canada said it expected inflation to remain at about one% throughout the year and to stay below its preferred 2% target until sometime in 2015.On individual items, there were some more pronounced movements, both up and down, including a 7.2% increase for fresh vegetables and 8.7% jump for fresh fruit. But overall, food prices rose only 1.8% over last year, slightly less than February’s rise.As well, tuition fees were up 3.7% on an annual basis, and property taxes rose 2.8%.Significant downward movements included a four% dip on mortgage interest costs, a 9.6% fall for video equipment, a 3.7% slide in air transportation and a 3.6% decline in non-alcoholic beverages. Travel tours were also less expensive, down 4.8%.On a monthly basis, prices increased by 0.2% from February to March as gas rose slightly, while clothing and footwear increased by 4.3%. But food prices were down overall by 0.4%.Regionally, the inflation rate was highest in Manitoba at 2.3% and lowest in British Columbia, at 0.5%.Canadian Press