Headline consumer inflation returned to pre-pandemic levels in March as the downwards pressure from the base year coupled with current price growth led to a sharp acceleration in the headline rate. Consumer prices rose 2.2% on a year-over-year basis in March, the largest increase since February 2020.

Higher gasoline prices, bolstered by a rising global demand for oil and production cuts in OPEC+ countries, were the main contributor to the acceleration in headline rate. Gas prices, measured year-over-year, were 35.3% higher in March, the largest increase in twenty years. Excluding gasoline, consumer inflation stood at 1.2%, up from 1.0% in February.

Shelter prices rose sharply in March, supported by higher building costs and the surging demand for single family homes. Measured year-over-year, shelter prices rose above the two percent mark (+2.4%) for the first time since the start of the pandemic. The homeowners’ replacement cost index, which partly reflects changes in new home prices, rose for the thirteenth consecutive month and was 7.9% higher than in March of last year. At the same time, mortgage interest costs fell for the eleventh consecutive month, and were down 6.3% from levels observed in March 2020.

Food price inflation held steady at 1.8% in March and has been below the 2% mark since November of last year. Prices for clothing and footwear were 5.4% lower than in March 2020.

On April 22nd, the agency reported on travel between Canada and other countries for February. While an advisory against travel outside Canada and a mandatory 14-day quarantine period for those returning were still in effect, additional restrictions were imposed as of February 22nd. Non-residents and returning Canadians arriving by air were required to take a COVID-19 test on arrival and remain in a government-authorized hotel while awaiting the results. Arrivals to Canada from other countries in February were down 93.6% year-over-year. Similarly, the number of Canadians returning from abroad was down 93.1% over the same period. Just under 111,800 Canadians flew home during the month, down by over half (-52.1%) from January.

Source: Statistics Canada