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Gas price drop tames Canadian inflation to one per cent in March

Statistics Canada said the annual rate of inflation fell two-tenths of a percentage point last month as gas prices dropped. CP/Lee Brown

OTTAWA – Statistics Canada says the annual rate of inflation edged down two-tenths of a percentage point to one per cent last month as most price increases remained modest and the cost of gasoline fell.

The March number takes some of the volatility out of the measure following February’s surprising 0.7 percentage point jump, putting inflation in line with the Bank of Canada’s expectations.

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The key contributor to the slower rate was a 0.3 per cent decline in the price of gasoline from a year ago, following February’s 3.9 per cent increase.

The agency said gasoline prices declined in seven of the 10 provinces. Six of the eight major components that go into the inflation rate rose, but all by less than two per cent.

On individual items, there were more pronounced movements, such as mortgage interest costs, which fell by four per cent and video equipment, which were down 9.6 per cent.

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Core inflation, which excludes volatile items such as gas and fresh fruit, also remained tepid, staying unchanged at 1.4 per cent.

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