Statistics Canada building and signs are pictured in Ottawa on Wednesday, July 3, 2019. THE CANADIAN PRESS/Sean Kilpatrick

Canadian annual inflation rate 1.9% last month as lower gas prices weigh on rate

Canadians did, however, pay more for mortgage interest costs

The annual inflation rate was 1.9 per cent in September for a second-straight month, keeping the indicator close to the Bank of Canada’s ideal two per cent target.

The new numbers released Wednesday in Statistics Canada’s latest consumer price index report show that price growth was once again held back by lower gas prices.

Inflation has now stayed at 1.9 per cent or higher for seven consecutive months.

Economists on average had expected a reading of 2.1 per cent for September, according to financial markets data firm Refinitiv.

The country’s price picture, on its own, is not applying pressure on the inflation-targeting Bank of Canada to adjust interest rates. The central bank’s next rate announcement is scheduled for Oct. 30.

Statistics Canada said a 10 per cent drop in gasoline prices compared with last year continued to weigh on the overall inflation rate. Gas prices, year-over-year, were down 10.2 per cent in August and 6.9 per cent in July.

Excluding pump prices, the inflation reading for September was 2.4 per cent for a third-straight month.

READ MORE: Canadian inflation decelerates to 1.9% as gas prices weaken

Upward momentum in price growth was also held back in September by lower costs, year-over-year, for internet access services, tuition fees and telephone services.

Canadians did, however, pay more for mortgage interest costs, vehicle insurance and auto purchases last month compared to the previous year.

Shoppers shelled out 3.4 per cent more for passenger vehicles last month than they did a year earlier as price growth in the category exceeded 2.5 per cent for a seventh-straight month, the report said. Statistics Canada called it the “strongest continuous stretch of growth” in the category since early 2017.

Year-over-year mortgage interest costs have increased through 2019 and were up another 7.5 per cent in September. The report said the growth has followed a series of interest rate hikes by the Bank of Canada between July 2017 and October 2018.

In terms of downward forces, the report said tuition fees decreased 3.6 per cent last month for the category’s first year-over-year decline since its creation in 1973. The drop was driven by an 8.9 per cent decrease in Ontario, where the provincial government cut tuition for the 2019-20 academic year.

The average of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures by omitting volatile items like gasoline, moved up slightly to 2.1 per cent last month from two per cent in August. The core readings are closely monitored by the Bank of Canada.

Andy Blatchford, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Rain storm causes Cowichan River to change course

Hatching fish to be monitored this spring

Business notes: CVRD sponsoring Green Business category at Black Tie Awards

The Cowichan Valley Regional District is once again partnering with the Duncan… Continue reading

Brentwood jr. girls playing at B.C. hoops championship

Brentwood College School’s junior girls basketball team is making history this week.… Continue reading

Lake Cowichan, Duncan to host Masters Curling Championship

Begining next Tuesday and running until March 8

B.C. residents in Wet’suwet’en territory have right to police presence: Public Safety Minister

Nevertheless, Bill Blair said officials remain ‘very anxious’ for the barricades to come down

Wet’suwet’en hereditary chiefs to meet today with federal and B.C. governments

Nationwide rail and road blockades have been popping up for weeks

Chinatowns across Canada report drop in business due to new coronavirus fears

Around the world, about 81,000 people have become ill with the virus

Endangered butterfly species to be reintroduced to Hornby Island

Hornby Island is about to play a major role in the saving… Continue reading

VIDEO: Province promotes ‘lifting each other up’ on 13th annual Pink Shirt Day

Students, MLAs, community members gathered at B.C. Parliament Buildings Wednesday

Prepare for new coronavirus like an emergency, health minister advises

About 81,000 people around the world have now become ill with COVID-19

Winnipeg police investigating graffiti on RCMP and other buildings

Manitoba Justice Minister Cliff Cullen denounced the vandalism

Nanaimo woman to compete in new season of ‘Big Brother Canada’

Carol Rosher, a cancer survivor, is one of 16 houseguests appearing on reality TV show

B.C. seniors’ watchdog calls for better oversight after recent problems at Retirement Concepts care homes

‘There is no financial incentive right now to be a good operator’ - Isobel Mackenzie

Most Read