Experts predicted the country’s inflation rate to climb, but Statistics Canada’s monthly report for February was eye opening for some.
“From 1.9 to 2.6 so shortly is concerning,” says retired management professor David Stuewe.
Statistics Canada’s consumer price index is based on prices that include sales taxes. The federal government’s GST/HST holiday was in place until the middle of February and calculations show without it, inflation would have reached three per cent.
“Canadians are seeing higher inflation as the sales tax holiday ended and that’s proof that cutting taxes makes life more affordable and hiking taxes makes life more expensive,” says Franco Terrazzano, president of the Canadian Taxpayers Federation.
Inflation rates spiked in the Maritimes with increases from 0.7 per cent on Prince Edward Island to 1.1 per cent in New Brunswick. All three provinces are below the national rate of 2.6 per cent.
P.E.I. and New Brunswick sit at two per cent while Nova Scotia is at 2.1 per cent.
“Canadians are still struggling with a high cost of living and especially as we head into a federal election, we need all federal party leaders to come to the table with significant tax cuts,” Terrazzano says.
Looming tariffs from China and the United States are fueling speculation inflation will continue to rise.
“I think the main message is Canadians have to be aware that we are going to see increases until this trade war is settled,” Stuewe says. “Canadians, like people around the world, that are going to be reevaluating how they spend their money.”
Some relief is expected as Ottawa removes the consumer portion of the carbon tax on April 1.
Nova Scotians will also see a one per cent decrease in the HST rate, which will drop to nine per cent on the same day.
Statistics Canada will publish inflation rates for March on April 15. It will be the first full month without the tax holiday so inflation is expected to continue to climb.
