Inflation rose 1.9 per cent last month, continuing its upward trend from 1.8 per cent in December, bringing year-over-year inflation to 8.6 per cent.
According to Statistics Canada’s Consumer Price Index, the jump was largely driven by a 25.9 per cent increase in Manitoba, where the province reintroduced its provincial gas tax after temporarily suspending it last year.
Overall, energy prices rose by 5.3 per cent in January following a 1 per cent increase in December. The primary factor was the rising cost of natural gas, which saw a 4.8 per cent year-over year increase.
On a month-over-month basis, energy prices rose even more sharply, increasing 6 per cent in January.
Canadians also paid more at the pump, with gas prices rising last month 8.6 per cent year-over-year and increasing 3.5 % compared to December.
“Increased energy prices, notably for gasoline and natural gas, contributed the most to the acceleration,” reads the report. “These price increases were partly offset by continued downward pressure on prices for products affected by the goods and services tax (GST)/harmonized sales tax (HST) break introduced in December.”
“On a monthly basis, the CPI rose 0.1% in January compared with a 0.4% decline in December,” it continued. “On a seasonally adjusted monthly basis, the CPI rose 0.1% in January.”
Passenger vehicles also rose by 2.3% year-over-year increase last month while used vehicles have decreased for the past 13th consecutive months.
However, food prices dropped by 0.6% year-over-year last month, marking the first yearly decrease since 2017.
This price decline was driven by a lack of food purchased by restaurants, which fell by 5.1%.
Alcoholic beverages sold in retail outlets dropped by 3.6 per cent last month, continuing their decline from a 1.3 per cent dip in December.
The federal government’s GST-HST holiday played a role, affecting approximately 10 per cent of all items included in the CPI basket.
“On a yearly basis, prices rose at a faster pace in six provinces, were unchanged in two provinces and fell in two provinces in January compared with December,” reads the report.
“The faster price growth in Manitoba and Saskatchewan in January was driven by energy prices. Excluding energy, the CPI in each of these two provinces increased 1.8% year over year.”