Canada sees biggest drop in prices since 1955

Inflation goes negative for month of June

Canada’s inflation rate went negative for the first time in 15 years. Inflation declined on a 12-month basis for the first time since November 1994, reaching negative 0.3 per cent in June. Statistics Canada says the drop in prices was primarily due to plummeting energy prices. The price for regular gasoline averaged $1.016/litre last month – down more than 24 per cent from a year ago. That’s why Douglas Porter, deputy chief economist with BMO Capital Markets, cautions that the price trend in Canada is not as dramatic as it might seem. “Outside of the deep dive in energy, there has actually been precious little major movement in underlying price trends, with core inflation continuing to surprise the Bank of Canada to the high side,” he explained on Friday. Still, he anticipates that the rising Canadian dollar will put downward pressure on prices over the next year.

Ottawa Citizen