Canada’s annual inflation rate remained flat at 1.7 per cent in May, according to the latest data from Statistics Canada released Tuesday. The federal agency says a smaller price increase for rent and a decline in travel tours put downward pressure on prices, while smaller price dips for gasoline and cell phone service blunted the overall decline.
On a monthly basis, the Consumer Price Index (CPI) rose 0.6 per cent last month. On a seasonally adjusted monthly basis, CPI was up 0.2 per cent.
StatCan says shelter costs rose three per cent year-over-year in May, following a 3.4 per cent increase in April. Rent rose 4.5 per cent on an annualized basis last month, a slowdown from a 5.2 per cent gain in April. The slowdown in rising rents was most significant in Ontario, where prices rose three per cent in May, after a 5.4 per cent jump in April.
“The increased availability of rental units, coupled with slower population growth compared with spring of the previous year, contributed to the slowdown in rent price growth in May,” StatCan wrote on Tuesday. “Given the large weight of Ontario nationally, these effects alone were enough to offset faster price growth in seven other provinces.”
For homeowners, the mortgage interest cost index fell for the 21st consecutive month in May, dropping from 6.8 per cent in April to 6.2 per cent in May.
Meanwhile, price breaks at the gas pumps led consumer energy prices lower for another month, falling 15.5 per cent year-over-year in May, versus a 18.1 per cent drop in April. StatCan says May gasoline prices are down year-over-year due in large part to the removal of the federal government’s consumer carbon tax, and corresponding provincial levies.
Analysts had expected the annualized rate of inflation to hold steady. Consensus estimates published by CIBC Economics last week called for a 1.7 per cent annualized reading for May.
Last month, CPI for April pulled back to 1.7 per centfrom 2.3 per cent in March. StatCan says this was largely due to lower energy costs, as the federal government removed its consumer-facing carbon tax, and benchmark oil prices fell.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on X @jefflagerquist.
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