Business
Canada's inflation slows in January, making rate pause more likely – Reuters
OTTAWA, Feb 21 (Reuters) – Canada’s annual inflation rate eased more than expected in January to 5.9%, data showed on Tuesday, which should allow the Bank of Canada to keep interest rates steady at its next meeting while it lets previous rate hikes sink in.
Analysts had expected inflation to edge down to 6.1% from 6.3% in December. Month over month, the consumer price index rose 0.5%, Statistics Canada said, again lower than analysts’ forecast of a 0.7% gain, after a 0.6% decline in December.
Statscan cited a base effect, or comparison with last year’s strong result, that should persist through June. In January 2022, prices surged at a time of Russia-Ukraine tensions and supply chain disruptions, and they increased to a peak of 8.1% in June.
The inflation figure “allows (the Bank of Canada) to stay on hold in March, despite the fact that the labor market was extraordinarily hot in the month of January,” said Andrew Kelvin, chief Canada strategist at TD Securities.
The Bank of Canada in January raised its benchmark interest rate to a 15-year high of 4.5% and became the first major central bank to say it would hold off on further increases as long as prices eased in line with its forecast.
Then Canada’s economy smashed expectations by adding a net 150,000 jobs in January, data showed earlier this month.
Before the inflation figures were released, money markets saw a 100% chance for another rate increase this year. Now they see a roughly 80% chance.
The bank forecasts inflation to slow to about 3% by the middle of 2023, and to come down to its 2% target next year. The next inflation report will come out after the central bank’s next policy-setting meeting on March 8.
The Canadian dollar was trading 0.4% lower at 1.35 per U.S. dollar, or 74.07 U.S. cents.
Excluding food and energy, January prices rose 4.9% compared with a 5.3% increase in December.
The average of two of the central bank’s core measures of underlying inflation, CPI-median and CPI-trim, came in at 5.1% compared with 5.3% in December.
The January inflation figures give the Bank of Canada “somewhat greater comfort in their decision to go on pause at least temporarily,” said Doug Porter, chief economist at BMO Capital Markets.
“A low-side inflation read will definitely prove to be a nice antidote to some of those high-side surprises,” he said.
The figures show prices coming down faster in Canada than in the United States, where annual inflation gained 6.4% in January. Goldman Sachs and Bank of America said they expect the U.S. Federal Reserve to raise interest rates three more times this year.
On Friday, Bank of Canada Deputy Governor Paul Beaudry said its policy-setting path can diverge from central banks in other countries as long as inflation is ultimately brought down to target.
Adding to the favorable base effect, cellular services fell 7.9% annually in January after increasing 2.5% in December, and consumers paid 6.2% more for passenger vehicles compared with 7.2% in December.
Mortgage interest costs, on the other hand, rose 21.2% annually in January, the largest increase since 1982, while food prices rose 10.4%, slightly faster than the 10.1% in December.
Separately, retail sales rose 0.5% in December, in line with forecasts, and Statscan’s flash estimate for January puts retail sales up 0.7% on the month.
Reporting by Ismail Shakil and Steve Scherer; Additional reporting by Fergal Smith in Toronto and Dale Smith in Ottawa; Editing by Mark Porter and David Gregorio
Our Standards: The Thomson Reuters Trust Principles.
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Business
Gas prices expected to rise 14 cents on Thursday
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Drivers are bracing for a double-digit spike at the gas pumps on Thursday, as the price is expected to rise 14 cents at midnight.
Roger McKnight, chief petroleum analyst withEn-Pro International Inc., tells CityNews the price at gas pumps is set to rise to 178.9 cents/litre at local stations. The price as of Wednesday is 164.9 cents/litre.
The last time gas prices were this high was back in August 2022.
McKnight says the spike is due to price increases for wholesale gas and only applies to gasoline. He adds the price for diesel will increase by 0.4 cents.
Earlier this month, the price rose to its highest levels in six months following the implementation of the federal carbon price, also referred to as the carbon tax.
That saw the carbon tax on gasoline go up by 3.3 cents per litre, while diesel increased by 4.1 cents per litre.
Business
Rupture on TC Energy's NGTL gas pipeline sparks wildfire in Alberta – The Globe and Mail
A section of TC Energy’s TRP-T NGTL gas pipeline system in Alberta ruptured and caught fire on Tuesday, sparking a wildfire in a remote area, the company said.
“An initial ignition of natural gas at the rupture site is now extinguished. We are working to support Alberta Wildfire in their response to contain a secondary fire,” the company said in a statement on its website.
TC said there were no injuries and it was working closely with first responders in the region.
How fire broke out at the TC gas pipeline near Edson, Alberta
The fire broke out about 40 km (25 miles) northwest of Edson, Alberta, in Yellowhead County. Canadian broadcaster Global News said there was a plume of flames and smoke visible from many kilometres away.
The Canada Energy Regulator (CER) said initial investigations indicated a rupture in a gas pipeline caused the fire, which was under control.
TC Energy said it has isolated and shut down the affected section of the NGTL system, and the remainder of the system is operating normally with no commercial impact.
The CER said it is sending inspectors to the area to monitor and oversee the company’s response and determine the impact of the incident.
NGTL is TC Energy’s natural gas gathering and transportation system that transports gas produced in Western Canadian Sedimentary Basin (WCSB) to markets in Canada and United States.
Business
Gas prices in GTA expected to rise 14 cents on Thursday – CityNews Toronto
Drivers in the GTA are bracing for a double-digit spike at the gas pumps on Thursday, as the price is expected to rise 14 cents at midnight.
Roger McKnight, chief petroleum analyst with En-Pro International Inc., tells CityNews the price at gas pumps is set to rise to 178.9 cents/litre at local stations. The price as of Wednesday is 164.9 cents/litre.
The last time gas prices were this high was back in August 2022.
McKnight says the spike is due to price increases for wholesale gas and only applies to gasoline. He adds the price for diesel will increase by 0.4 cents.
Earlier this month, the price rose to its highest levels in six months following the implementation of the federal carbon price, also referred to as the carbon tax.
That saw the carbon tax on gasoline go up by 3.3 cents per litre, while diesel increased by 4.1 cents per litre.
With files from John Marchesan of CityNews
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