The annual rate of inflation hit 6.7% in March, the fastest year-over-year increase in the consumer price index in over 31 years, Statistics Canada said Wednesday.<\/p>\n
The increase compared with a gain of 5.7% in February, and was the highest reading since inflation hit 6.9% in January 1991 when the goods and services tax (GS) was introduced.<\/p>\n
Fuelling much of the increase in March were higher prices at the pumps as gasoline prices rose 39.8% per cent compared with the same month one year earlier.<\/p>\n
Statistics Canada said the consumer price index would have been up 5.5% year-over-year if it had excluded gasoline from its calculations, suggesting far broader price pressures.<\/p>\n
The agency said prices were driven higher in March on the back of the country’s hot housing market, supply-chain constraints and the war in Ukraine that has affected prices for oil and food.<\/p>\n
Statistics Canada said homeowner replacement costs, which includes prices for new home prices, rose 12.9% year-over-year in March.<\/p>\n
Grocery store prices rose 8.7% year-over-year, the fastest annual rate since March 2009, aided by the largest annual increase in dairy and egg prices since February 1983.<\/p>\n
Russia’s invasion of Ukraine was also blamed for jumps in pasta prices and cereal, the latter rising at the fastest annual pace since June 1990.<\/p>\n
Russia and Ukraine are major wheat exporters.<\/p>\n
Provincially, Statistics Canada said growth was most pronounced in Prince Edward Island where prices rose 8.9% year-over-year.<\/p>\n
As prices rose faster on an annual basis in March, average hourly wages were up by 3.4%, still far behind inflation and eating into consumers’ purchasing power across income levels, said BMO chief economist Douglas Porter.<\/p>\n
\u201cThis is not sustainable to have a gap of more than three percentage points between inflation and wages,\u201d he said.<\/p>\n
\u201cEither inflation has got to come down fast, or wages have got to rise up to meet if not exceed inflation in fairly short order, and I think I think it’s going to be a little bit of both.\u201d<\/p>\n
The growing rate of inflation has spooked economists and central bankers amid signs that Canadians are beginning to expect inflation to stay higher for longer.<\/p>\n
Last week, the Bank of Canada increased its key policy rate by half a percentage point, raising the benchmark interest rate to 1% with warnings that more rate hikes are to come this year.<\/p>\n
The average of the three core measures of inflation, which are considered better gauges of underlying price pressures and closely tracked by the Bank of Canada, was 3.77% in March. That the highest recorded since March 1991 and up from the 3.53% in February.<\/p>\n","protected":false},"excerpt":{"rendered":"
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