The annual pace of inflation heated up in November as gasoline prices posted their first year-over-year increase since October 2018, Statistics Canada said Wednesday.
The agency said the consumer price index rose 2.2 per cent compared with a year ago to end a three-month streak where the annual pace of inflation had held steady at 1.9 per cent.
The increase in the pace of inflation compared with October came as energy prices in November posted their first year-over-year increase since April. Energy prices climbed 1.5 per cent compared with a year ago compared with a decline of 2.9 per cent in October.
Gasoline prices were up 0.9 per cent year-over-year compared with a drop 6.7 per cent in October.
Royal Bank senior economist Josh Nye said oil prices were down in November last year.
“The fact that wasn’t repeated this November means energy price growth is back into positive territory,” he said, noting that inflation will likely remain above two per cent in the short term due to the lower gasoline prices a year ago.
Strongest pace in a decade
However, Nye said the underlying inflation trends appear to be firming with the average of the core measures of inflation at their strongest pace in a decade.
Excluding gasoline, which had been weighing on overall inflation in recent months, the consumer price index was up 2.3 per cent compared with a year ago, matching the increase in October.
And, the average of Canada’s three measures for core inflation, which are considered better gauges of underlying price pressures and are closely watched by the Bank of Canada, was 2.17 per cent compared with a revised figure of 2.10 per cent for October.
In the statement accompanying the Bank of Canada’s decision to keep its key interest rate on hold at 1.75 per cent earlier this month, the bank said it expected inflation to increase temporarily in the coming months due to year-over-year movements in gasoline prices.
However, the central bank said at the time that it “continues to expect inflation to track close to the two per cent target over the next two years.”
Higher costs for food, auto insurance, mortgage interest
CIBC senior economist Royce Mendes said the Bank of Canada won’t be too concerned with headline inflation rising above two per cent for a few months, given that it’s largely the result of base effects.
“However, if the core measures accelerate further, monetary policy-makers could start to take more notice of consumer prices, something they haven’t had to do given that inflation has been so consistently around the central bank’s target recently,” Mendes wrote in a report.
The overall increase in prices of 2.2 per cent compared with a year ago was driven by increased mortgage interest costs, passenger vehicles and auto insurance premiums. The increases were partly offset by lower prices for telephone services, Internet access and traveller accommodation.
Canadians also saw the price for meat rise 5.2 per cent compared with a year ago, the fifth month of increases at or above 4.0 per cent. The cost of fresh or frozen beef was up 6.2 per cent, while ham and bacon prices rose 9.1 per cent. Fresh or frozen pork was up 0.7 per cent.
Regionally, prices on a year-over-year basis rose more in November in every province except British Columbia.
Canada will not approve new thermal coal mining projects
Canada will not approve new thermal coal mining projects or plans to expand existing mines because of the potential for environmental damage, Environment Minister Jonathan Wilkinson said on Friday.
“The government considers that these projects are likely to cause unacceptable environmental effects within federal jurisdiction and are not aligned with Canada‘s domestic and international climate change commitments,” he said.
In a statement, Wilkinson said thermal coal – primarily used for generating electricity – was the single largest contributor to climate change.
Canada produced 57 million tonnes of coal in 2019, just 1% of the overall global total. Canadian output in 2019 comprised 47% thermal coal and 53% metallurgical coal, which is used for steel manufacturing, according to official data.
“The continued mining and use of thermal coal for energy production in the world runs counter to what is needed to effectively combat climate change,” Wilkinson said. In 2018, Ottawa introduced regulations to phase-out conventional coal-fired electricity across Canada by 2030.
The new policy would apply to privately-held firm Coalspur’s plans to expand an existing thermal coal mine in the western province of Alberta, he said.
(Reporting by David Ljunggren; Editing by Kirsten Donovan)
Victoria cancels Canada Day celebration after mass grave discovery
Victoria British Columbia has decided to cancel a virtual celebration of the national Canada Day holiday on July 1 after discovery of unmarked graves of children at a now-defunct indigenous boarding school.
The city council of Victoria voted on Thursday instead to air programming led by the local indigenous nation at a later date. Local indigenous leaders who usually participate in Canada Day ceremonies declined after remains of 215 children were found at the former school in Kamlooops, northern British Columbia.
“They’re grief-struck and reeling, as are many indigenous people across the country,” Lisa Helps, mayor of Victoria, told the Canadian Broadcasting Corporation on Thursday.
Victoria will “produce a broadcast to air later this summer guided by the Lekwungen people and featuring local artists, that explores what it means to be Canadian, in light of recent events,” she said.
The Songhees Nation, of which the Lekwungen people are members, did not immediately respond to a request for comment.
(Reporting by Moira Warburton in Vancouver; Editing by Cynthia Osterman)
NATO summit seeks return to gravitas with Biden
NATO leaders will seek reassurance on Monday from that after four years of denigration by his predecessor Donald Trump, the alliance can count on the support of the United States, its most powerful member.
In a more pared-back gathering than past NATO summits in part due to COVID-19 restrictions, without fighter jet fly-pasts, the 30 allies will gather in their glass and steel headquarters to agree reforms for a multipolar, post-Cold War world where China’s military rise presents a new challenge.
The summit is a “unique opportunity” to renew transatlantic ties, according to NATO Secretary-General Jens Stoltenberg.
Brussels’ town hall in the historic Grand Place will be illuminated in NATO’s signature blue on Sunday night while the Belgian capital’s famed bronze fountain of a boy urinating will also don a NATO-branded outfit on Monday.
“The first thing is for Biden to recommit to NATO’s collective defence,” Jamie Shea, a former senior NATO official who was at a 2018 summit at which Trump considered quitting the alliance.
Trump brought a television reality-show quality to the NATO summits he attended from 2017 to 2019, diplomats said, attracting international attention but also wearing down allies whom he called “delinquent” for not spending enough on defence.
Biden has already annulled a Trump decision to pull U.S. troops out of Germany, although there is still American pressure for European allies to pay more towards their own security. Stoltenberg said on Friday that European allies, Turkey and Canada will have collectively increased their defence budgets by $260 billion by the end of 2021, compared to 2014.
“This summit with Biden should be a signal to the world that NATO is back,” said a senior European NATO diplomat who was also at the alliance during the Trump years.
“There was so much noise and it was a difficult time. But now we can actually talk about the things that matter, the defining security challenges of our time,” the envoy said.
Founded in 1949 to contain a military threat from the Soviet Union, NATO celebrated its 70th anniversary at a summit in London in December 2019.
Russia, climate change, Afghanistan and new technologies are on the menu of the day-long summit, which will culminate in a special leaders’ session in the amphitheatre-like North Atlantic Council chamber.
“I expect Allies will agree a new cyber defence policy for NATO,” Stoltenberg said. “It will recognise that cyberspace is contested at all times,” he told a news conference.
Having strengthened its capability to carry out its core mission of defending Europe following Russia’s 2014 annexation of Crimea, NATO now aims to be more ambitious.
In a twist of fate, the NATO summit will agree reforms to the alliance, known as NATO 2030, which were set in motion after Trump questioned its relevance.
Stoltenberg will set out nine areas where NATO could modernise over the medium term, including more joint allied funding of military operations. However, France has already expressed concern about the proposal, fearing it will take money away from national military priorities.
Leaders are likely to agree to draw up a new master strategy document, known as NATO’s Strategic Concept, to include China’s military rise as a challenge for the first time.
(Reporting by Robin Emmott; Editing by Giles Elgood and Angus MacSwan)