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High Gasoline Prices in September Drove Annual Inflation Rate to 3.4 Per Cent

Posted on: Tuesday, 25 October 2005, 09:01 CDT

OTTAWA (CP) - Gasoline prices went through the roof in September and pushed the annual inflation rate to 3.4 per cent from 2.6 per cent in August.

Statistics Canada said prices at the pump were up 34.7 per cent, fuel oil cost 37.0 per cent more than a year earlier, and natural gas cost 7.4 per cent more, all driven by concerns over supply capacity and world increases in the price of crude.

The so-called core inflation rate, which ignores volatile factors such as energy and food prices and is most closely watched by the Bank of Canada in setting economic policy, was only half the overall rate, or 1.7 per cent.

But the overall rate is the highest in more than two years.

Things were even more volatile on a month-to-month basis, with prices up 0.9 per cent between August and September, one of the largest increase in 15 years.

There hasn't been a higher monthly jump since the GST was introduced in 1991 and higher gasoline and tobacco taxes hit in 1989.

On a month-to-month basis, gasoline prices jumped 10.8 per cent, the fifth biggest increase in more than 55 years.

Gasoline wasn't the only factor in the higher year-to-year inflation rate.

Purchase and leasing costs for cars rose 2.3 per cent, restaurant meals cost 3.0 per cent more and homeowner's replacement cost, which reflects the price of fixing worn-out housing structure, rose by 4.6 per cent.

Women's clothing costs rose 7.5 per cent with the arrival of fall collections.

However, tuition fees were up only 1.8 per cent, the lowest increase in three decades.

The cost index for computers and computer supplies actually dropped 21 per cent from September 2004 and helped moderate the over-all increase.

Fruit and vegetables were also cheaper.

Here's what happened in the provinces and territories. (Previous month in brackets.)

-Newfoundland 3.8 (2.5)

-Prince Edward Island 5.1 (3.2)

-Nova Scotia 4.3 (3.0)

-New Brunswick 3.8 (2.7)

-Quebec 3.6 (2.8)

-Ontario 3.3 (2.7)

-Manitoba 3.5 (2.9)

-Saskatchewan 3.0 (2.6)

-Alberta 3.5 (2.4)

-British Columbia 2.4 (2.1)

-Whitehorse, Yukon 3.3 (2.6)

-Yellowknife, N.W.T. 3.2 (2.6)

-Iqaluit, Nunavut 2.2 (2.0)

The agency also released rates for major cities but cautioned that figures may fluctuate widely because they are based on small statistical samples. (Previous month in brackets.)

-St. John's, N.L., 3.7 (2.4)

-Charlottetown-Summerside, 4.6 (3.1)

-Halifax, 3.8 (2.5)

-Saint John, N.B. 3.9 (2.7)

-Quebec, 3.5 (2.7)

-Montreal, 3.4 (2.7)

-Ottawa, 3.5 (2.8)

-Toronto, 2.7 (2.4)

-Thunder Bay, Ont., 2.7 (2.1)

-Winnipeg, 3.5 (2.9)

-Regina, 2.8 (2.5)

-Saskatoon, 3.0 (2.6)

-Edmonton, 3.4 (2.2)

-Calgary, 3.4 (2.3)

-Vancouver, 2.1 (1.9)

-Victoria, 2.6 (2.2)

Source: Canadian Press

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