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Canadian inflation rises in April; gas prices strengthen from carbon pricing

Last Updated May 15, 2019 at 5:54 am PDT

Statistics Canada's offices at Tunny's Pasture in Ottawa are shown on Friday, March 8, 2019. THE CANADIAN PRESS/Justin Tang

OTTAWA — Canada’s annual inflation rate picked up its pace in April — a month that saw stronger price pressures on gasoline in provinces that have new carbon-pricing systems.

Statistics Canada’s consumer price index increased two per cent last month, up from its reading of 1.9 per cent in March and 1.5 per cent in February.

The April reading, which matched the expectations of economists, brings the measure in line with the Bank of Canada’s ideal inflation target of two per cent — a neutral position that doesn’t put immediate pressure on governor Stephen Poloz to adjust interest rates.

Consumers paid more for mortgage borrowing costs, fresh vegetables and auto sales last month, while they saw lower price tags for hotels, kids’ clothing and digital equipment.

The report says the six provinces where carbon levies were introduced or increased in April saw larger month-over-month rise in prices at the pump.

The provinces include New Brunswick, Ontario, Manitoba and Saskatchewan, which were mandated to follow the federal carbon-pricing system, as well as Prince Edward Island and B.C., which made voluntary carbon-levy changes.

The average of Canada’s three gauges for core inflation, which are considered better measures of underlying price pressures by omitting volatile items like gasoline, slowed slightly to 1.9 per cent in April, down from two per cent the previous month.

Here’s what happened in the provinces (previous month in brackets):

— Newfoundland and Labrador: 1.5 per cent (1.2)

— Prince Edward Island: 1.2 (1.0)

— Nova Scotia: 1.3 (1.3)

— New Brunswick: 1.7 (1.6)

— Quebec: 1.8 (1.8)

— Ontario: 1.9 (1.8)

— Manitoba: 2.3 (2.3)

— Saskatchewan: 2.3 (1.8)

— Alberta: 2.2 (2.3)

— British Columbia: 2.7 (2.6)