Canada's Inflation Rises In July

By Agence France-Presse Canada's consumer price index (CPI) rose 0.5% in July from June and climbed 2.1% in a year, Statistics Canada said Aug. 21. "This 12-month increase was the largest since September 2001, after which energy prices started falling, and significantly higher than the 1.3% observed in June," the government agency said. Cigarette prices, which jumped 42% from July 2001, exerted the strongest upward pressure on the overall CPI, followed by gasoline and electricity, automotive vehicle insurance premiums and food purchased from restaurants. The CPI excluding energy climbed 2.8% from July 2001, a change only slightly higher than that measured in June, when it was up 2.6%, it said. Energy prices fell 3.1% from July 2001 to July 2002, compared with a 12-month drop of 10.4% recorded in June, due mostly to a drop in gasoline prices. "In addition to the fall in natural gas and fuel oil, a decrease in the cost of mortgage interest also had a moderating effect on the increase in the CPI," the agency said. For the month, July's increase was slightly higher than the increases of 0.2% in May and 0.3% in June, due mostly to higher prices for gasoline, electricity, air transportation and traveler accommodation, as well as higher cigarette taxes. In July, consumers paid 2.8% more for gasoline than in June, a reversal from the falling prices of the previous two months. The 3.2% rise month over month in Canada's electricity index can be attributed almost entirely to the 9.2% increase in prices in Ontario, due to the price changes on its free market. Lower prices for the purchase of vehicles and natural gas put downward pressure on the monthly increase. Copyright Agence France-Presse, 2002