B.C. shoppers aren’t getting the same kind of relief at check-out counters as their fellow Canadians as inflation remains much stickier on the West Coast than the rest of the country.
Canada’s inflation rate cooled to 5.2 per cent last month – down from 5.9 per cent in January, according to Statistics Canada data released on Tuesday.
But B.C. was the only province where inflation did not cool down. Instead, the annual rate remained unchanged between those months at 6.2 per cent.
This marks the eighth straight month inflation in the province outpaced that of the rest of the country.
Economists at TD Bank predicted such a scenario late last year, noting B.C. and Ontario can expect inflation to be “more persistent” in 2023 as they continue to deal with high housing costs even if the price of homes take a hit.
Rent in B.C. went up 8.1 per cent on an annual basis in February.
And at the same time across Canada, the mortgage interest cost index increased at a faster rate year over year in February (+23.9 per cent) compared with January (+21.2 per cent).
Statistics Canada said that’s the fastest pace since July 1982.
The Bank of Canada paused rate hikes earlier this month amid signs inflation was cooling on a national level.
"There was nothing in today's inflation report that would move the Bank of Canada off of its pause on interest rate moves,” TD Bank senior economist Leslie Preston said in a note. “Unlike the [U.S.] Federal Reserve, domestic inflation trends mean the BoC can ride out the current volatility in financial markets driven by stresses in the banking sector internationally.”
Economists at CIBC echoed that sentiment, predicting the Bank of Canada would hold off on any rate hike next month in light of Tuesday’s inflation data.
“There's really no underlying reason for the Bank to hike further, especially with the Canadian dollar finding a footing. At the same time, there is still plenty of wood to chop in order to get inflation comfortably back into the target zone,” BMO chief economist Douglas Porter said in a note.