Canada inflation slows in December to 0.7 percent

OTTAWA: Consumer prices in Canada rose 0.7 percent in December, climbing at a slower pace than the previous month as the costs of air travel and gasoline dropped, the government statistical agency said Wednesday.

Consumer confidence was at its highest since the onset of the pandemic, as the approval of the first two Covid-19 vaccines gave Canadians hope for a return to normalcy, Statistics Canada said.

At the same time, several regions imposed new lockdowns and other restrictions to slow the spread of the novel coronavirus as the number of cases surged to new highs.

Higher costs for building materials and a low inventory of homes for sale pushed up home prices, but mortgage rates fell to record lows.

Gasoline prices were up from the previous month for the first time since July 2020, driven in part by production cuts in major oil-producing countries and limited travel, but were lower year over year.

Demand for air travel during the holiday season, meanwhile, fell significantly, resulting in cheaper airfares.

Prices for fresh fruit also fell, as favorable weather conditions in growing regions of the United States and Mexico boosted supplies of fresh fruit and vegetables.