Canadian Consumer Price Index Increased 2.2% Year-Over-Year in March 2021

Statistics Canada (StatsCan) is reporting that the Consumer Price Index (CPI) for March rose 2.2% on a year-over-year basis, up from a 1.1% gain in February. As Canada marked the end of the first year of the COVID-19 pandemic, price growth in March 2021 was accentuated by what is known as base-year effects, originating in March 2020. The broad decline in prices in spring 2020, when headline CPI growth slowed to 0.9% in March 2020, had an upward impact on consumer inflation in March 2021. As the upward impact of these temporary base-year effects will influence the 12-month movement over the next few months, the historical movements affecting current growth trends will be examined. Excluding energy, the CPI rose 1.1% in March 2021 on a year-over-year basis. Year over year, consumer price growth increased within a context of rising consumer confidence and improving employment conditions as COVID-19 restrictions eased in many regions of the country. In March, prices rose in five of the eight major components year over year, with transportation (+7.1%) and shelter (+2.4%) prices contributing the most to CPI growth. Compared with March 2020, consumers paid less for clothing and footwear (-5.4%) and for household operations, furnishings and equipment (-0.2%). Gasoline prices led the increase in consumer energy prices, rising 35.3% year over year in March, the largest gain in gasoline prices since March 2000.