CALGARY - Calgary experienced the lowest inflation rate - at 0.6 per cent - among major Canadian cities, in the 12 months to December, Statistics Canada reported Tuesday.

The rate was up 0.1 per cent from November.

Alberta saw consumer prices rise by 0.8 per cent on an annual basis, also the lowest rate inflation in Canada among provinces, and by 0.2 per cent on a monthly basis.

Shoppers in Alberta may be feeling more comfortable opening their wallets and purses these days, but they still aren't seeing big price increases for most consumer items, said

Todd Hirsch, senior economist with ATB Financial in Calgary.

Much of Alberta's increase in the Consumer Price Index was driven by a 10.2 per cent annual jump in gasoline prices, he said in a research note.

Other items in Alberta posting notable increases were home and mortgage insurance (16.9 per cent) and meat (6.0 per cent). Falling prices were observed for women's clothes (10.0 per cent) and electricity (4.6 per cent), added Hirsch.

"Because so much of the national increase in inflation was driven by gasoline prices, it's unlikely that the Bank of Canada will be prompted to hike interest rates on March 1," he said. "Nonetheless, the central bank will continue to keep a close eye on inflation over the coming months."

Statistics Canada said prices were up 2.4 per cent across the country in the 12 months to December but were unchanged from the previous month.

In Canada, between December 2009 and December 2010, gasoline prices increased 13.0 per cent, after advancing 7.2 per cent in the 12 months to November. Excluding gasoline, the CPI rose 1.8 per cent in December, identical to the increase recorded in November, explained Statistics Canada.

In addition to paying more for gasoline, consumers paid 6.2 per cent more for electricity and 9.2 per cent more for natural gas in December. Overall, energy prices rose 10.5 per cent during the 12 months to December, said the federal agency.

The Bank of Canada's core index advanced 1.5 per cent in the 12 months to December, following a 1.4 per cent rise in November.

In November, consumer prices in Calgary were unchanged from November 2009 but down 0.2 per cent from October. Alberta experienced a 0.1 per cent year-over-year increase in November and a monthly decrease of 0.2 per cent.

At the national level, consumer prices increased by 0.1 per cent on a monthly basis and by 2.0 per cent year-over-year in November.

"Going forward, the only significant inflationary pressure will likely stem from food prices. Much like we are seeing on the international scale, rising agricultural commodity prices are likely to feed into higher grocery bills for Canadians in the coming months. Nonetheless, outside of food, inflation pressures will remain under wraps," said Diana Petramala, economist with TD Bank Financial Group, in a research note.

"Expectations that crude oil prices will remain flat during 2011, suggests that energy price pressures will abate in the coming months. Further, a cooling in the Canadian housing market, moderate consumer spending, and a Canadian dollar above par will likely keep inflation in check for the first half of 2011. All said, we expect inflation to continue to average just 1.5 per cent over the first half of 2011, and only gradually climb to 2.0 per cent by mid-2012."

Statistics Canada said there was an annual increase in seven of the eight major components of the Consumer Price Index.

The largest increase occurred in the transportation component, where prices rose 4.9 per cent.

Shelter costs rose 2.7 per cent.

The federal agency said food prices rose 1.7 per cent as did prices for household operations, furnishings and equipment.

The recreation, education and reading price index went up 1.1 per cent while the health and personal care index increased 2.3 per cent.

Prices for clothing and footwear declined 2.0 per cent, added Statistics Canada.

mtoneguzzi@calgaryherald.com

Annual inflation rates by province in December:

Alberta 0.8%

Newfoundland and Labrador 2.5%

Prince Edward Island 1.5%

Nova Scotia 2.7%

New Brunswick 1.8%

Quebec 1.6%

Ontario 3.3%

Manitoba 1.2%

Saskatchewan 2.0%

British Columbia 2.4%

Overall 2.4%

Source: Statistics Canada

 

 

Inflation in Calgary was the lowest across the country in December.

Photograph by: Christina Ryan, Calgary Herald