BUSINESS

Canadian Inflation Jumps As Carbon Taxes Come Into Force

02/24/2017 08:55 EST | Updated 02/24/2017 09:01 EST

OTTAWA — A surge in gasoline prices helped push Canada's annual inflation rate well beyond expectations in January to 2.1 per cent — an increase that coincided with the implementation of new carbon-pricing policies in Ontario and Alberta.

Statistics Canada says the higher cost for transportation was the contributor to the higher inflation rate, with gas prices experiencing a 20.6 per cent boost compared to the year before.

The overall inflation reading last month was stronger than December's rate of 1.5 per cent.

traffic toronto

Traffic on Toronto's Gardiner Expressway. Inflation spiked in January, the same month that Alberta and Ontario introduced new carbon taxes. (Photo: Getty Images)

However, excluding gasoline, the January inflation rate was also 1.5 per cent.

The agency says year-over-year inflation rates were higher in every province last month compared to a year earlier.

A consensus of economists had predicted 1.6 per cent inflation for January, according to Thomson Reuters.

Statistics Canada says consumers paid 2.1 per cent less for food last month compared to a year earlier.

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