Saskatchewan inflation up, but CPI down in January

Rate slowed across Canada

REGINA — Inflation in Saskatchewan increased 1.4 per cent in January over the same period in 2014 — the second-highest year-overyear increase among the provinces next to Ontario at 1.6 per cent and above the national average increase of one per cent, Statistics Canada reported Thursday.

But the cost of the basket of goods that makes up the consumer price index (CPI) in Saskatchewan actually declined slightly (0.1 per cent) in January compared with December, the federal agency said.

More importantly, January’s annual inflation rate was the lowest since November 2013, said Doug Elliott of Sask Trends Monitor. “Last year, the average (rate of inflation) was 2.4 per cent. In fact, this is the lowest rate of inflation we’ve had for more than 12 months. This is back to where (inflation) was in 2012-13.”

Elliott said the declining inflation rate is a consequence of the ongoing “tug of war” between transportation costs and food prices. “We had a big increase in grocery prices and big decline in gasoline prices. In January, grocery prices were up 5.9 per cent, which is really going to hurt the low-income folks. And the transportation index is down 3.7 per cent. Those are the two big-ticket items; (food and transportation) account for half of our spending.

“That’s what we can expect in February and March,” Elliott said, adding he expects the inflation rate to range between one to 1.5 per cent for the rest of 2015.

Nationally, the annual inflation rate slowed to one per cent in January following a rise of 1.5 per cent in December, which was also a deceleration from the previous month. Slumping gas prices — the lowest since April 2009 — were the main drag on inflation in January as pump prices fell 26.9 per cent in January compared with the previous year.

The fall in oil prices has dragged down the Canadian dollar. Cheaper gas also counter- balanced rising prices in seven of the eight categories in the agency’s report.

Statistics Canada says higher food prices and shelter costs led January’s overall rise in the consumer price index. The cost of food rose 4.6 per cent in January compared to the previous year, while shelter costs rose two per cent on an annual basis.

Core inflation, which Bank of Canada closely monitors and excludes some items from the volatile energy and food categories, rose by 2.2 per cent as it did in December.