Canadian inflation inches up to 1% in June

Canadian inflation grew at a one per cent annual rate in June, up from 0.9 per cent in May, according to new data from Statistics Canada. 

Higher food prices helped lead the June 2015 inflation increase, as consumers paid 3.4 per cent more than they did in June 2014. The price of meat continued to increase, up 6.6 per cent from June 2014. Dairy products cost 2.5 per cent more than they did in June 2014, and the price of fresh fruit increased by 3.3 per cent.

The cost of shelter increased by one per cent on an annual basis, accelerating from a 0.5 per cent gain in May. Home insurance and mortgage insurance cost 9.2 per cent more than they did in June 2014.

On Wednesday, the Bank of Canada cut its key interest rate from 0.75 per cent to 0.5 per cent in the face of a sluggish economy. The central bank adjusts that interest rate to try and keep core inflation between one and three per cent.

Core inflation, which excludes volatile items like food and energy, increased at a 2.3 per cent annual rate in June.

Gas prices still falling 

Lower energy prices helped keep inflation from rising further in June. Gasoline prices were down 14.1 per cent from June 2014, slightly less than the 17.4 per cent annual decline in May. 

On a monthly basis, gas prices increased six per cent from May to June.

Statistics Canada's index of natural gas prices decreased by 10.9 per cent over the 12 months to June, and fuel oil prices fell by 17.8 per cent during the same period. Electricity prices, however, rose by 3.2 per cent. 

Without the moderating effect of cheap energy prices, inflation increased 2.1 per cent from last June.

Provincial inflation rates

By province, annual inflation rates in June were as follows (May's rate in brackets):

• Newfoundland and Labrador, 0.6 per cent (0.3)
• Prince Edward Island, -0.1 per cent (-0.7)
• Nova Scotia, 0.8 per cent (0.5)
• New Brunswick, 1.0 per cent (0.6)
• Quebec, 1.0 per cent (1.2)
• Ontario, 1.0 per cent (0.9)
• Manitoba, 1.0 per cent (0.5)
• Saskatchewan, 1.9 per cent (1.5)
• Alberta, 1.7 per cent (0.6)
• British Columbia, 0.8 per cent (0.8)
• Whitehorse, Yukon, -0.2 per cent (-0.6)
• Yellowknife, N.W.T., 2.0 per cent (1.5)
• Iqaluit, Nunavut, 1.9 per cent (1.9)