Sharp drop in inflation across Canada as carbon tax cut begins to show in data

Canada’s inflation rate fell sharply in April as Prime Minister Mark Carney’s decision to remove the consumer carbon tax brought relief for millions of households.

Prices increased 1.7 per cent last month compared with last year, down from 2.3 per cent in March.

In British Columbia, the annual inflation rate was down to two per cent in April from 2.6 per cent in March.

But in Quebec, the only province to retain a carbon tax, the rate increased from 1.9 per cent to 2.2 per cent.

Across Canada as a whole, gas prices fell 18.1 per cent in April compared with the same month last year.

Natural gas prices fell 14.1 per cent.

Statistics Canada said the relief from the carbon tax combined with falling global oil prices to make the price decline particularly high.

Excluding energy, the agency explained, inflation in April was 2.9 per cent, up from 2.5 per cent in March according to the same measure.

Food was up 3.8 per cent in April, compared with 3.2 per cent in March, while shelter increased in price by 3.4 per cent (compared with 3.9 per cent in March).

StatCan also highlighted more expensive travel tours in April, with prices up 6.7 per cent compared with 12 months earlier.

In March, there had been a 4.7 per cent decline.

The Bank of Canada is set to reveal its next interest rate decision on June 4, having kept it at 2.75 per cent last month.