Gas prices drive inflation rate to 30-month high Attention: REGISTER / LOGIN to view the image!
Updated Tue. Oct. 25 2005 9:38 AM ET

CTV.ca News Staff

Sky-high gasoline prices in September drove the annual inflation rate to 3.4 per cent from 2.6 per cent in August, said Statistics Canada on Tuesday.

Gas prices went up 34.7 per cent between August and September because of concerns over supply capacity and world increases in the price of crude.

Those factors also accounted for the rise in fuel oil cost by 37.0 per cent compared to a year ago, while natural gas costs went up 7.4 per cent.

The so-called core inflation rate was only half the overall rate, or 1.7 per cent. Core inflation ignores volatile factors such as energy and food prices and is most closely watched by the Bank of Canada in setting economic policy.

"When you take out gasoline, ... the core rate of inflation is pretty much in line with where it's supposed to be," said Michael Kane of Report on Business Television in Toronto.

But in September, "when we saw the full effect of the one-two punch in hurricanes in the southern United States and that crazy spike where gasoline prices went to as much as $1.44 ... that crazy spike drove inflation numbers substantially higher."

That jump drove the overall rate to the highest it's been in more than two years. There hasn't been a higher monthly jump since the GST was introduced in 1991 and higher gasoline and tobacco taxes hit in 1989.

On a month-to-month basis, gas prices jumped 10.8 per cent, the fifth biggest increase in more than 55 years.

Gasoline, although the biggest factor in the higher year-to-year inflation rate, wasn't the only factor:

• purchase and leasing costs for cars rose 2.3 per cent;
• restaurant meals cost 3.0 per cent more;
• the homeowner's replacement cost, which reflects the price of fixing worn-out housing structure, rose by 4.6 per cent; and
• women's clothing costs rose 7.5 per cent with the arrival of fall collections.

Tuition fees, however, were up only 1.8 per cent -- the lowest increase in three decades.

The cost index for computers and computer supplies actually dropped 21 per cent from September 2004 and helped moderate the over-all increase.

Fruit and vegetables were also cheaper.

The agency also released rates for major cities but cautioned that figures may fluctuate widely because they are based on small statistical samples. (Previous month in brackets.)

• Newfoundland 3.8 (2.5)
• Prince Edward Island 5.1 (3.2)
• Nova Scotia 4.3 (3.0)
• New Brunswick 3.8 (2.7)
• Quebec 3.6 (2.8)
• Ontario 3.3 (2.7)
• Manitoba 3.5 (2.9)
• Saskatchewan 3.0 (2.6)
• Alberta 3.5 (2.4)
• British Columbia 2.4 (2.1)
• Whitehorse, Yukon 3.3 (2.6)
• Yellowknife, N.W.T. 3.2 (2.6)
• Iqaluit, Nunavut 2.2 (2.0)

Comments :
Please also note that the City Councils in ALL BC Municipalities have raised Property Taxes again to usurious heights ! anywhere from 4 % to 8 % . Where do these people get off of ?
Wages are definitely not keeping up with the costs of living and inflation ... WTF ?

2005?

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