Canadian inflation down slightly in February

Energy costs continue to drive higher prices

Consumer costs in February were 2.2 per cent higher than in February 2010, down from a 2.3 per cent increase year-over-year in January, Statistics Canada reports.

On a monthly basis, February prices were 0.3 per cent above January 2011.

As has been the case for months, energy costs have been the driver of higher prices. Gasoline was 15.7 per cent higher over the year in February. Drivers faced double-digit price increases for gasoline in all provinces except Manitoba.

The transportation component saw the largest increase, where prices rose 5.1 per cent in the 12 months to February. This is after a 4.8 increase in January.

Among major components, alcohol and tobacco rose 2.7 per cent, while clothing and footwear fell by 2.0 per cent.

At 0.9 per cent, core inflation — or inflation minus the most volatile elements, including energy, some fruits and vegetables, mortgage interest, and tobacco — was at its lowest point since the Bank of Canada pioneered the concept in 1984.

The largest increases in consumer prices were observed in Nova Scotia at 3.4 per cent, and Newfoundland and Labrador at 2.9 per cent. Fuel oil and other fuels are used more commonly for home heating in those provinces.

The smallest increases were experienced in Alberta at 1.2 per cent and British Columbia at 1.8 per cent.

In the United States, the rate of inflation stands at 2.1 per cent, with energy and food prices the principal source of the increase.

Latest stories