Canada’s Inflation Rate Turns Negative For First Time Since 2009

Inflation in Canada has turned negative.

For the first time since the 2009 recession, Canadian inflation went negative after the coronavirus lockdown shuttered the world economy.

Statistics Canada said consumer prices dropped 0.2% in April from the same month a year earlier. That’s down from a 0.9% annual rate in March and 2.2% in February. The latest Consumer Price Index (CPI) report added inflation to the list of economic indicators showing an historic impact from the coronavirus pandemic.

Collapsing gasoline prices have pulled inflation lower over the past two months, but weak demand should keep inflation at extremely low levels for an extended period and could even spur worry about deflation.

Core inflation, which factors out volatile items like energy prices and are often seen as a better measure of underlying price pressure, declined to 1.8% from 1.83% in the prior month, the lowest level since January 2019. Prices fell 0.7% in March, matching the largest one-month drop since 2008.

Statistics Canada said it was unable to gather as much data as usual concerning inflation because in-person collection was suspended, and some establishments were closed due to the COVID-19 pandemic lockdown.