Canada’s inflation rate fell to 2.8 percent in June, its lowest level in more than two years.
Statistics Canada said a sharp drop in the price of gasoline compared to this time last year was the main reason for the drop, which pushed Canada’s official inflation rate to its lowest point since March 2021.
Gasoline prices were 21 percent lower during the month than in the same month a year earlier.
If gasoline is removed from the data, the headline inflation rate would have been four percent.
Another factor that pushed down the rise in the cost of living was telecommunications services, which fell 14.7 percent from a year ago.
“This was the result of both lower prices for mobile data plans and promotional prices,” Statistics Canada said.
Internet access prices drop
Rogers completed the purchase of rival Shaw in April and, at least in the short term, the result has been a flurry of promotional offers among the telecom giants.
The data agency noted that Internet access prices fell 3.2 percent last year and 5 percent in the month of June alone, the biggest drop in a month since 2019.
“This was mainly due to promotions in Ontario and lower prices in Quebec,” Statistics Canada said.
On the other side of the ledger, food and mortgage costs were the biggest single factors driving the rate higher. The cost of food continues to rise at a rate of more than nine percent. Meanwhile, mortgage interest costs have risen more than 30 percent in the past year.
The new inflation data comes just days after the Bank of Canada decided to raise its benchmark interest rate, for the tenth time in just over a year.
The bank justified its decision by saying that more adjustments were needed to bring inflation back to its two percent target. The inflation rate peaked last June at 8.1 percent and was 3.4 percent last month.