‘Data for Business’ is an effort of the Langley Chamber, in partnership with the Canadian Chamber’s Business Data Lab, to bring our members reports, stats, and analysis on economic and business data to help inform business and investment decisions. Read our latest update below:

Inflation picked up in March, with rising energy costs—particularly gasoline—driving an increase in overall price growth across Canada. While some underlying measures remain stable, the latest data highlights continued pressure on both businesses and consumers, particularly as global factors influence fuel and food prices. Here’s what you need to know from the latest inflation report.
 
Summary

CPI rose 2.4% year over year in March, up from 1.8% in February. The increase in headline inflation was largely driven by a sharp rise in energy prices, specifically gasoline. While the effects from the end of GST/HST break put downward pressure, food purchased from stores rose in March.

Adjusting for indirect taxes, CPI rose nearly 3% in March. Prices increased 0.9% on a monthly basis, with gasoline driving the momentum.

Year over year, prices rose at a faster pace in all provinces in March compared with February, with BC seeing increases of 2.5%, just ahead of the national average but 4^th lowest amongst provinces.

Gasoline prices rose nearly 6% year-over-year in March, less than we expected but still surged 21% on a monthly basis—the largest monthly increase on record. Gasoline directly added 0.22 percentage points to headline inflation, with natural gas prices offsetting some of the increase (-18%).

Food prices slowed to 4% in March, down from 5.4% in February. This category was affected by the GST/HST break and these effects faded in March. Grocery prices accelerated 4.4% in March, up from 4.1% in February, as fresh vegetables continue to see strong price movement. Restaurant prices eased in March to 3.2%, mostly on base-year effects.    Impacts from ongoing closures of the Strait of Hormuz, which accounts for 20% of nitrogen-based fertilizers, could impact food prices going forward.

The Bank of Canada’s core inflation measures also improved, with the average of CPI trim and CPI median holding at 2.3% growth. Inflation momentum, measured by the three-month annualized growth rate, rose to 1.6%, still well-below the 2% inflation target.

Commentary:

“Inflation is starting to reflect the shock Canadians have been feeling at the gas pump. Higher energy prices were the main driver of upward pressure, even as some lingering base-year effects fade. The longer the conflict in Iran and the closure of the Strait of Hormuz continue, the more it will test Canadians’ patience and that risks pushing already elevated inflation expectations higher. That said, underlying price pressures aren’t a major concern for now, with CPI excluding gasoline slowing in March. We expect the Bank of Canada to hold at its next meeting, but the balance of risks is becoming more challenging with inflation risks tilting up.”  - Andrew DiCapua, Principal Economist, Canadian Chamber of Commerce