Highlights

- As the national inflation rate fell to a mere 0.4% in April from 1.2% in March, this move was reflected broadly across Canada's regions, with all provincial inflation rates falling below 1.0%. Food prices (+7.1%) were mainly responsible for upward price pressures, while transportation costs (-8.0%) provided some deflationary offset as the price of gasoline and passenger vehicles fell. A significant easing in shelter cost increases, at only 0.2% in April compared to 2.1% in March, was also recorded across the country as natural gas prices were 17.5% lower than a year prior.

- The most significant turnaround came in Alberta, were 0.9% inflation (March) turned into 0.7% deflation (April) as a result of even steeper declines in energy prices (natural gas, electricity, gasoline) than those recorded in other parts of the country. The Atlantic region also recorded deflation, albeit at the milder rate of 0.2%.

- All other provinces saw an easing in inflation, lead by Ontario and Saskatchewan. After experiencing 1.8% inflation in March, both these provinces saw two-thirds lower inflation rates of 0.6% in April. After experiencing the highest inflation rate in the country for the previous 8 months, Saskatchewan ceded this position to Manitoba (0.9%) in April.

- Meanwhile, the national core inflation rate eased from 2.0% to 1.8% as seasonally-adjusted core prices rose 0.2% on the month, reflecting that on a trend basis, generalized outright deflation is not on the radar yet. On a regional basis, this is reflected by the mild easing in inflation as measured by the CPI excluding food & energy prices, from 1.4% to 1.2%. As significant slack continues to build up in the economy, expect these inflation measures to continue easing over the next few months.