indicatorThe Owl

Inflation loses some steam in March

While it’s true that inflation decelerated in March, it's hardly the first time this has happened.

By 23 April 2020 2 min read

Lower prices at the pumps helped push overall consumer prices in Alberta down by 1.0 per cent in March versus February. 

Compared to the previous March, year-over-year prices were up by a modest 0.7 per cent, which is much lower than the 2.5 per cent year-over-year growth posted in February.

However, if gasoline prices are excluded, monthly prices fell by just 0.4 per cent while year-over-year prices were up by a more respectable 1.8 per cent. Gasoline prices in Alberta fell by 19.1 per cent in March and were down by 29.0 per cent compared to 12 months earlier.

Nationally, month-over-month prices fell by 0.6 per cent. At 0.9 per cent, the national year-over-year inflation rate in March was well below February’s 2.2 per cent.

As was the case in Alberta, a sharp decline in gasoline prices was the main reason for the weak national numbers. If gasoline is excluded, monthly consumer prices in Canada were unchanged in March and were up by 1.6 per cent compared to the year before.

A fair bit of hay was made yesterday about how the weak inflation numbers show the “unprecedented” impact of the pandemic on prices. But, while it’s true that inflation decelerated in March, it's hardly the first time this has happened. In fact, the national year-over-year inflation rate has been lower than it was last month 20 times since 2000. It’s been lower 31 times in Alberta.

Statistics Canada noted that the 1.3 percentage point drop in the inflation rate between February and March was “the largest year-over-year deceleration in the growth of consumer prices since September 2006.” But, if you exclude gasoline, June 2011 was the last time things slowed by more than they did last month and, in both cases, a global pandemic was definitely not in play.

So what do March’s numbers actually tell us? They tell us that gasoline prices were way down and that the early effects of the pandemic are a likely explanation for why the inflation rate excluding gasoline stalled. But we can’t say for sure because we can’t isolate the effects of the pandemic and we can’t ignore that inflation has fallen on numerous occasions for other reasons.

The numbers for April, assuming Statistics Canada is able to gather accurate data with so many businesses closed, will be more telling, but we will still only have a partial sense of the long-term effects of the pandemic on inflation.


A note on COVID-19: The COVID-19 pandemic is having a major impact on the economy here in Alberta and around the world. The Owl will report on these impacts when good information is available while continuing to track regularly scheduled releases of economic data and long-term trends. Please go to for COVID-19-related updates from ATB Financial.

Year-over-year prices were up by a modest 0.7 per cent

Year-over-year prices were up by a modest 0.7 per cent.

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