Canada inflation rates increase by 1.9% cause higher prices

Stastics Canada continues to share that food is one of the biggest reasons for inflation costs, specifically apples, oranges, potatoes, tomatoes, and lettuce. (Photo: Statistics Canada/Facebook)

Prices of fresh vegetables, mortgage interest costs, and auto insurance are now expected to increase as the Statistics Canada’s consumer price index last March declared a 1.9% percent rise in inflation from one year ago. According to Thomson Reuters Eikon, this result was in line with the expectations of economists.

Basing from last year’s numbers, Canadians paid 15.7 % more for fresh vegetables, 8.1% more on mortgage borrowing costs, and 5.6% more for car insurance this March. On the other hand, gasoline prices, internet costs, and travel tours have decreased in price.

Statistics Canada continued that food is one of the biggest reasons for inflation costs, specifically apples, oranges, potatoes, tomatoes, and lettuce, the latter because of the E. coli outbreak in Romaine lettuce last fall, causing a cut in supply.

The number one province affected by the inflation costs is British Columbia, that is seeing a rise by 2.6%, while Prince Edward Island is affected the least with one percent.

Toronto-Dominion Bank economist James Marple told CBC Canada that he expects these results to be a temporary fix for a long-term goal, stating, “Inflation made a bit of a comeback in March, but mostly as past declines in prices dropped out of the year-on-year calculation.” He added, “Assuming a relatively stable loonie going forward, this impact will not last.”

Bank of Canada governor Stephen Poloz’s opinion is in line with that statement, predicting that the economy will strengthen in the second half of 2019. The nation’s central bank will make a policy announcement next Wednesday, April 24. In a statement earlier in the year, Bank of Canada said that they believe the nation’s inflation will remain below its two percent target for most of the year.

CIBC Chief economist Avery Shenfeld talked about the viewpoints of the national bank in an interview, saying, “You can worry a lot about the decimal places in inflation from month to month, but the story is that inflation is right where the Bank of Canada wants it to be.”