Inflation rate jumps to 2.4 per cent as fuel prices surge

A new Statistics Canada report says the price boom is largely due to skyrocketing oil prices, but increased food costs are also weighing on people's pockets.

Canada’s inflation rate climbed to 2.4 per cent in March with skyrocketing fuel prices the biggest driver of the overall hike.

New data from Statistics Canada shows the annual inflation rate jumped more than half a percentage point from 1.8 per cent in February.

“Today’s inflation numbers just reinforces what we’re seeing every day. Pump prices have gone up a lot and then we find out a month later what it did to inflation,” said ATB Financial chief economist Mark Parsons.

“It shouldn’t be a surprise.”

The federal data agency says gas prices surged by just over 21 per cent in March compared to the month prior, which is the largest month-over-month increase on record.

The figures for March came out Monday — the same day the suspension of the federal fuel excise tax kicked in. The four-month break represents a cut of about 10 cents per litre —savings welcome for many drivers on the road.

“I watch the gas prices everywhere I drive and if I see a low price, I pop in no matter whether my tank’s three quarters full or empty and, yeah, I’m surviving,” said Calgary driver Bud Peterson.

If gasoline was not considered, inflation would have held around 2.2 per cent, StatCan’s report said.

Food prices also climbed by 4.4 per cent with fresh vegetables soaring by 7.8 per cent compared to this time last year.

“Believe it or not, coming into the war in Iran, we were in pretty good shape on the inflation front,” Parsons told CTV News. “(Canada was) below two per cent. The Bank of Canada has a new problem to worry about.”

“They were not quite ready to crack open the champagne and celebrate, but it’s something that (the Bank of Canada) needs to keep a close eye on now,” he said.