Jump to full article: Canadian Press, 2002-07-23
Author: SANDRA CORDON / Canadian Press
Intro: Higher taxes on cigarettes helped push the annual inflation rate up to 1.3 per cent in June from one per cent the month before, Statistics Canada said Tuesday. . .
OTTAWA (CP) - Higher taxes on cigarettes helped push the annual inflation rate up to 1.3 per cent in June from one per cent the month before, Statistics Canada said Tuesday.
Rising food prices, especially for potatoes, also added to inflation last month. But those increases were generally offset by a dramatic drop in energy costs compared with one year earlier. The result?
Inflation isn't a big problem for the economy, analysts say. "This is a case of there being lots of smoke but little fire in the CPI (consumer price index)," said Warren Lovely, senior economist with CIBC World Markets.
"When you strip out that tobacco tax hike, it was a pretty muted month for consumer prices."
Just over half of the June inflation jump was blamed on higher cigarette taxes, especially in Ontario, Quebec and New Brunswick.
Those taxes, which kicked in last month, pushed the cost of smokes up by 32.1 per cent compared with one year earlier.
The inflation report didn't help the luckless dollar, which took its biggest single-day drop in a decade Monday.
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