P.E.I.’s annual rate of inflation rose to 3.2 per cent in May, above the national average and the second-highest rate in the country, but Islanders may be able to take a pass on some items where prices are up the most.
Canada’s consumer price index was up 2.9 per cent last month compared to May of 2023. Only Nova Scotia had a higher rate of increase than P.E.I.’s, coming in at 3.7 per cent.
Inflation was relatively flat through the latter half of 2023 but began to rise again at the beginning of the year.
While P.E.I.’s inflation rate is well above the Bank of Canada’s two per cent target for inflation, a closer look shows prices are not rising as quickly in many core areas.
“Energy prices are once again the main driver of inflation on the Island compared to the national average,” said UPEI economist George Jia. “Nationally, energy prices increased by 4.1 per cent year over year, whereas on the Island they surged by a significant 11.7 per cent.”
Fuel oil is up a whopping 23.6 per cent, but the increase won’t sting as much until later in the year because not a lot of heating oil is bought in the summer. Gasoline, up 10.6 per cent, is more of a worry for those who can’t avoid driving.
Inflation on those fuels includes an increase in the federal fuel charge on gas, while the fuel charge is being applied to heating oil for the first time.
The inflation on gas comes to about 15 cents a litre, about four cents of which can be attributed to the increased fuel charge. On heating oil, which did not include the fuel charge before the May 1 change, the effect is bigger. Inflation comes to about 25 cents a litre, of which about 18 cents is due to the new fuel charge.
