Rising gas prices push inflation back up to 1.9% in January

Canada’s annual inflation rate increased in January, climbing to 1.9% after a spike in gas prices overshadowed a federal sales tax break, according to Statistics Canada.

StatsCan pointed out that gasoline jumped 8.6% year-over-year. 

Much of that increase was by a 25.9% surge in Manitoba, where the provincial gas tax was reintroduced. 

The temporary tax cut, offered by Ottawa, did provide some relief, but it was outweighed by the rising cost at the pumps.

Natural gas prices also went up in January, rising 4.8% compared to the same month last year. 

StatsCan said higher demand in Ontario and Quebec drove prices higher from an oversupply a year ago.

At the same time, restaurant food prices dropped 5.1% and alcohol prices fell 3.6%. 

Both decreases were tied to the federal tax break, which ended on February 15.

Without the tax break, StatsCan said the annual inflation rate would have reached 2.7%, up from 2.3% in December. 

Officials said the inflation trend is still moving upward.

Mortgage interest costs rose by 10.2% from last year, although this is now the seventeenth consecutive month of slower growth.