MNI DATA REACT: Canada Apr CPI Down 0.2% YOY, Most Since 2009

By Greg Quinn

     OTTAWA (MNI) - Canada's inflation rate fell 0.2% in the 12 months ended

April, the first decline since the last recession in 2009, as Covid-19 kept

people from clothing stores and taking travel tours.

     The consumer price index also fell 0.7% from March, the biggest decline

since 2014, Statistics Canada reported Wednesday from Ottawa. Both declines

matched the median in an MNI economist survey. 

     Transportation costs fell 4.4%, and gasoline prices dropped a record 39% as

people needed to drive less and there was a global supply glut, StatsCan said.

Clothing and footwear prices fell 4.1%, including a record monthly drop of 5.9%.

     The figures are well outside the BOC's 1%-3% target band. The central bank

has said inflation will be around zero this quarter and the economic shutdown in

a worst-case scenario may mean negative inflation throughout the year. Governor

Stephen Poloz has cut interest rates to zero and swollen the balance sheet to a

record CAD417 billion, while downplaying deflation risks in a health lockdown he

says is unlike the loss of confidence in a typical recession.

     Today's figures supported the idea of a narrow price decline. Inflation

excluding energy was 1.6% in April from a year ago, and the average of the BOC's

three core CPI measures was 1.8%, little changed from March. 

     Another report showed wholesale sales down 2.2% in March, less than the 6%

seen in the MNI economist median. 

--MNI Ottawa Bureau; +1 613-314-9647; email: greg.quinn@marketnews.com

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