Inflation across Canada rose slightly to an annualized rate of 1.9% in January but remains below the central bank’s 2% target.
Statistics Canada reports that the Consumer Price Index (CPI) rose 1.9% year-over-year in January, following an increase of 1.8% in December.
Most of January’s gain was due to higher energy prices, which rose 5.3% in January following a 1% increase in December, driven by higher prices for gasoline and natural gas.
Prices at the pump increased 8.6% on a year-over-year basis in January. Excluding gasoline, inflation in Canada rose an annualized 1.7% during the year’s first month.
Offsetting higher prices for gasoline and natural gas to heat homes was continued downward pressure exerted by the goods and services tax break introduced this past December.
Prices for food sold at grocery stores fell 0.6% on a year-over-year basis in January, the first yearly decrease since May 2017, said Statistics Canada.
At the same time, prices for food purchased from restaurants declined 5.1% year over year, which is more than triple the previous record decline of 1.6%.
Canadians also paid less for alcoholic beverages purchased from stores (down 3.6%) in January compared with a year earlier.
Across the country, inflation rose the most in the provinces of Manitoba and Saskatchewan during January, driven by higher energy prices.
The Bank of Canada targets inflation at an annualized rate of 2%.
