Why Alberta's inflation was higher than the national rate again in March

Alberta's inflation rate fellin March but remained higher than the national rate,according to new data released Tuesday by Statistics Canada.

The provincial rate stood at 3.5 per cent in March,down from 4.2 per cent in February.

Both months were affected by a temporary quirk in the data related to electricity rebatesthat the Alberta government issued last year and are caught up in the inflation calculations this year, although the effect was diminished in March.

Nationally, the inflation rate was2.9 per cent in March, up slightly from from 2.8 per cent in February.

Trevor Tombe, an economist with the University of Calgary, says several factors account for the 0.6-percentage-point gap between the provincial and national inflation rates.

The first is the data quirk related to electricity rebates.

At this time last year, the provincial government was issuing rebates that were directly applied to Albertans' electricity bills.

These rebates temporarily drove down the actual power bills Albertans were paying and that decline was picked up by Statistics Canada's inflation-tracking algorithms, making electricity costsin 2024 look artificially higher by comparison.

"Of the 0.6-percentage-point gap between Alberta and Canada overall, I estimate 0.2 points is due to this issue with electricity bills," Tombe said.

The effect on the province's inflation figures in March was smaller than it was in February, because the rebates were worth only $25 per month in March 2023, versus $75 per month in February 2023.

Rent and natural gas prices

Tombe estimates rent accounts for another 0.2 percentage points of the difference between the national and provincial inflation rates.

Costs for rented accommodations were up 8.3 per cent nationally in March compared to a year earlier, while in Alberta they were up 13.7 per cent.

The numbers were even higher in the Calgary metropolitan area, where renters were paying 17.7 per cent more for their housing compared to March 2023.

Tombe says differences in natural gas prices in Alberta compared to the rest of Canada in March also contributed to the province's higher inflation rate for the month.

Those prices are captured in overall shelter costs, which saw the largest price increase out of all the broad categories Statistics Canada tracks.

Food costs in Alberta were up 3.8 per cent in March compared to a year earlier; they were up 3.9 per cent in February.

Three broad categories saw price declines in March:

• Household operations, furnishings and equipment.
• Clothing and footwear.
• Recreation, education and reading.