Canada inflation jumps to 6.7%

OTTAWA — Canadians paid 6.7 per cent more for goods and services in March than a year earlier, the government statistical agency said on Wednesday, marking the largest rise in inflation in three decades.

Following inflation above 5 per cent in both January and February, the March figure topped economists' expectations and prompted predictions of another hefty central bank interest rate hike soon.

"It's clear that the Bank of Canada needs to continue to act 'forcefully' to quell further inflationary pressures," Desjardins analyst Royce Mendes said in a research note. 

After a 50 basis point increase in the Bank of Canada's key lending rate, he said to expect another 0.5 percentage point hike in June.

Statistics Canada said the inflation increase was the largest since Canada introduced a consumption tax in January 1991.

Price increases in March were spread across all major categories, amid sustained upward pressure in the housing market, as well as "substantial supply constraints and geopolitical conflict, which has affected energy, commodity, and agriculture markets", the agency said in a statement.

Year on year, consumers notably paid 39.8 per cent more for gasoline in March, and 61 per cent more for fuel oil and other fuels.

A global shortage of semiconductors, a key input in vehicle assembly, continued to factor into higher prices for cars and trucks.

Supply chain issues and higher input and shipping prices contributed to an increase in the cost of furniture.

Shoppers paid 8.7 per cent more for food at grocery stores.

Canadians also paid more to dine out, travel and stay at hotels.