Energy prices drive P.E.I. inflation even higher, topping country at 11.1%

·3 min read
Fuel oil inflation on P.E.I. is up triple digits. (Laura Meader/CBC - image credit)
Fuel oil inflation on P.E.I. is up triple digits. (Laura Meader/CBC - image credit)

Hopes that inflation may have peaked on P.E.I. were dashed by the consumer price index for May, released by Statistics Canada Wednesday morning.

Inflation on the Island got significantly worse. The annual rate in May was 11.1 per cent, up from 8.9 per cent in April.

Once again, as has been the case for months, P.E.I.'s inflation rate was the highest in the country.

Canada's rate was 7.7 per cent.

The next highest was in Nova Scotia and New Brunswick, where the rate was 8.8 per cent.

Energy costs, and to a lesser extent rent, are the major factors driving P.E.I.'s inflation beyond the national level.

Inflation by category

Inflation for fuel oil and other fuels in Canada was an astonishing 95 per cent, but it was almost a third higher on P.E.I. Gasoline was up 58 per cent, as compared to 48 per cent nationally.

The consumer price index for rent eased slightly, dropping from a 15.3 per cent inflation rate in March to 9.0 per cent in May. The rate was still double that in Canada as a whole.

In some categories inflation on the Island was lower than Canada's.

Fresh fruits and vegetables were up 8.2 per cent on P.E.I., but 10.7 in Canada. Owned accommodation costs were up 4.1 per cent on the Island, and 7.2 per cent in the country as a whole.

Annual inflation rates

P.E.I.'s Official Opposition reacted to news of inflation deepening by calling on Premier Dennis King to take action, with Green Party Leader Peter Bevan-Baker saying in a written statement: "Islanders need more than a free bag of potatoes and a block of cheese to make ends meet."

The statement called on King and Finance Minister Darlene Compton "to explain what government is doing immediately — not five or six months from now — to help Islanders facing threats to the wellbeing and security of themselves, their families, and their businesses."

Province 'will continue to assess'

A spokesperson for the provincial Department of Finance told CBC News in a statement that "any new supports should be targeted to areas that are most affected" by inflation so that factors pushing up prices don't linger and become accepted as the "new normal" on the Island.

The statement pointed out that rent controls are in place on P.E.I. for existing units, but can't govern what rents are being charged for new units coming onto the market, "which is where we are seeing the largest increase in CPI."

Among the measures cited in the statement as actions the province has already taken are:

  • An emergency inflation support payment "that approximately 90,000 Islanders will receive in July," amounting to $150 for people with the lowest incomes.

  • A one-time top-up of social assistance payments.

  • More funding for food banks, community fridges and the Salvation Army Home Heating Program.

  • Improvements to the province-wide transit system and subsidies to allow fares to drop.

"As always, the government will continue to assess and identify areas of need to best support Islanders while making fiscally prudent decisions to ensure our provincial economy prospers and grows at a responsible and beneficial rate," the statement concluded.

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