Province’s inflation rate highest in nation

Saskatchewan’s annual inflation rate in April was 1.2 per cent, the highest of any province, according to Statistics Canada.

By comparison, inflation in Canada’s other oil-producing provinces, Alberta and Newfoundland and Labrador, was below the national average of 0.8 per cent.

“Saskatchewan has the dubious distinction of being the only province to suffer the economic shock of lower oil prices without a corresponding moderation of consumer prices,’’ United Steelworkers economist Erin Weir said.

The country’s annual inflation rate decelerated under the weight of low energy prices to just 0.8 per cent last month — its smallest increase since October 2013, Statistics Canada said Friday.

The agency’s April inflation reading, which was released less than a week before the Bank of Canada’s next scheduled interest-rate announcement, was much lower than the 1.2 per cent increase in March.

Statistics Canada’s consumer price index found cheaper year-over-year energy prices were among the biggest factors behind the weaker inflation rate — as prices rose in seven of the index’s eight major categories.

Gasoline prices fell 21 per cent in April compared with the previous year, while fuel oil tumbled 20 per cent and natural gas dropped by 14.6 per cent, the report said. The agency found that prices in all other major categories rose to the point that excluding energy items would bring the inflation rate up to 2.2 per cent

The items with the most upward pressure on prices included meat, which rose 11.2 per cent compared to a year earlier. Home and mortgage insurance rose 8.6 per cent and telephone services crept up 6.3 per cent.

Consumer prices rose last month in seven provinces — with Newfoundland and Labrador, Prince Edward Island and New Brunswick having negative inflation.

The core inflation rate, which is monitored closely by the Bank of Canada and excludes some volatile items such as gasoline, was 2.3 per cent last month. It followed a reading of 2.4 per cent in March.

In February, the central bank warned the turbulence of the global oil-price crash could briefly bump inflation into negative territory, but it also said at the time that there was no reason to worry about outright deflation.

Even with the weaker inflation rate for April, Bank of Canada governor Stephen Poloz is expected to stand pat on the key overnight interest rate next Wednesday.

Last month, the bank said its outlook for inflation, the key indicator behind rate decisions, remained “roughly balanced.”

On a seasonally-adjusted monthly basis, inflation dropped 0.1 per cent in April, which followed an increase of 0.3 per cent in March.

Statistics Canada also released March data total retail sales, which it estimates were $42.47 billion, an increase of 0.7 per cent compared to the previous month. In Saskatchewan, retail sales were on par with the national trend, posting a 0.7 per cent increase to $1.55 billion in March from $1.53 billion February.

However, compared to a year ago, retail sales fell by 4.4 per cent in Saskatchewan, the second-largest drop among provinces and a stark contrast to nationwide growth of 3.1 per cent. Weir said the year-overyear decline in retail sales in March “provided more evidence of the economic slowdown.”

“SASKATCHEWAN HAS THE DUBIOUS DISTINCTION OF BEING THE ONLY PROVINCE TO SUFFER THE ECONOMIC SHOCK OF LOWER OIL PRICES WITHOUT A CORRESPONDING MODERATION OF CONSUMER PRICES.”

ECONOMIST ERIN WEIR