The federal agency said the annual inflation rate in the province in July was 1.3 per cent, while it was 2 per cent for all of Canada.
“In Alberta, prices for natural gas fell 15.1 per cent compared with July 2018, amid a sustained supply glut in the commodity market. The homeowners’ replacement cost index, which is driven by the price of new homes, fell 2.6 per cent year over year, the largest decline since January 2010,” it said.
On a monthly basis, the Consumer Price Index was up 0.6 per cent from June in Alberta and by 0.5 per cent across the country.
StatsCan said gasoline prices in Canada declined 6.9 per cent year over year in July after falling 9.2 per cent in June, as tighter supply in the United States following a refinery closure led to month-over-month increases in the central and eastern regions of Canada.
“Consumer prices blasted ahead in July, easily sailing past even our above-consensus expectation. … As we had believed, airline fares were a significant contributor to the change in July, but that’s due to a methodology change and should be reversed in the months ahead. Travel tours were also up, due to that same change in calculation,” said Royce Mendes, an economist with CIBC Economics, in a commentary note.
“Gasoline prices added support to the headline move, but that too is likely to be reversed, with fuel costs falling in recent weeks. Telephone services were a bit of an offset to those gains, given the introduction of unlimited data plans from some of the large cellular providers. While the biggest moves were largely idiosyncratic, the core common measure did tick up to 1.9 per cent, from 1.8 per cent previously.
“That said, there could be some weakness in prices in the months to come as the airline and travel tours categories reverse these gains, and gasoline costs fall. Furthermore, the mortgage interest costs component, which has been the largest contributor over the past year to gains is likely to cool off as interest rates have fallen. Still, for today, Canadian bond yields should rise and the Canadian dollar will likely trade stronger, but overall the report shouldn’t do much to alter thinking at the Bank of Canada as many of the moves seem likely to reverse.”