Canada’s inflation rate slowed to 4.3 per cent in March, the smallest increase since August 2021.
That was down from a 5.2 per cent increase the previous month, according to Statistics Canada.
The agency said the year-over-year slowdown was due to what is known as a base-year effect.
Canadians saw broad price increases last March — and throughout early 2022 — amid Russia’s invasion of Ukraine.
Those higher prices were used as the basis for year-over-year comparison, leading to a downward impact on inflation.
“On a year-over-year basis, Canadians paid more in mortgage interest costs, which was offset by a decline in energy prices,” StatCan said in its monthly report released Tuesday.
Grocery prices outpace overall inflation
Despite the overall cooldown, grocery prices continued to soar and outpace overall inflation.
Food purchased from stores rose 9.7 per cent year over year in March, down from 10.6 per cent the month before.
The slowdown, said StatCan, was due to lower prices for fresh fruits and vegetables across the country.
Fresh fruit prices increased 7.1 per cent year over year in March compared to 10.5 per cent in February. Prices for grapes and oranges contributed the most to the deceleration.
Cucumbers and celery helped slow price increases for fresh vegetables to 10.8 per cent in March from 13.4 per cent in February.
On the flip side, price growth slowed on a year-over-year basis for non-alcoholic beverages, meat, vegetables, dairy and bakery products.
Gasoline prices dropped 13.8 per cent year over year in March, marking the second straight month of decreases and the largest yearly decline since July 2020.
“The fall in gasoline prices was mainly driven by steep price increases in March 2022, when gasoline rose 11.8% month over month as a result of supply uncertainty following Russia’s invasion of Ukraine,” said StatCan.
Homeowners’ replacement costs continued to slow in March, rising 1.7 per cent year over year compared with 3.3 per cent in February.
But on the flip side, mortgage interest costs rose 26.4 per cent year over year in March compared to 23.9 per cent the month before.
“This was the largest yearly increase on record as Canadians continued to renew and initiate mortgages at higher interest rates,” said StatCan.
Regional inflation numbers
Prices rose at a slower pace in March compared with February in all provinces, according to StatCan.
Overall price growth slowed the most in Atlantic Canada due to lower fuel prices.
Manitoba (5.2 per cent), Saskatchewan (4.9 per cent), Quebec (4.7 per cent), British Columbia (4.7 per cent) and Nova Scotia (4.6 per cent) had the highest rates of inflation.
That was followed by Ontario (4.3 per cent), New Brunswick (4.2 per cent), Prince Edward Island (3.9 per cent), Newfoundland and Labrador (3.4 per cent) and Alberta (3.3 per cent).
You can view the full report by clicking here.
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