OTTAWA: Inflation in Canada rose at its fastest pace in a decade in April, mostly due to the statistical comparison to last year when prices tanked amid early pandemic shutdowns, but also as gasoline and shelter costs rose, data showed on Wednesday.

Canada’s annual inflation rate rose to 3.4%, from 2.2% in March, Statistics Canada said. Analysts polled by Reuters had expected the annual rate to rise to 3.2% in April.

A third wave of Covid-19 infections prompted many Canadian provinces to again impose strict restrictions in April, though generally not as harsh as those a year ago.

“If we can post numbers like this in lockdown with stay-at-home orders, just imagine what happens when the economy reopens. This is an across-the-board surprise,” said Derek Holt, vice president of Capital Markets Economics at Scotiabank.

Gasoline prices rose 62.5% in April, the largest year-over-year increase on record. Fuel prices fell sharply in April 2020, as the pandemic limited travel and temporarily reduced international trade. Gasoline was up 1.8% on the month.

Shelter price gains also accelerated in April, rising 3.2% year-over-year compared with 2.4% in March, mostly due to demand for single-family homes. The homeowners’ replacement index posted its largest gain since 1989.

Food prices acceleration slowed, rising 0.9% in April versus 1.8% in March, in part due to lower fresh vegetable costs. Canada imports many fresh fruits and vegetables, and the strong Canadian dollar makes those imports cheaper.


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