Gas Prices Lowering Canadian Inflation Rate

Filling up at the gas station is one of those inevitable necessities for many Canadians. The need for a car – to get to and from work, to pick up and drop off the kids at school and pretty much to get to any point A to any point B in a reasonable time – is a great one.

Therefore, the price of gas is generally a concern on the mind of drivers everywhere.

Earlier today, The Canadian Press reported that Canada's inflation rate remained in the negative for the third straight month, citing the low cost of gasoline and energy as the main reason.

It wasn't too long ago that many Canadians were reasonably upset over the price of gas as it remained well above a dollar per litre for a healthy portion of the calendar year. According to Statistics Canada, gasoline and food prices have been leveling off as of late.

As the press release notes, in August of 2008, filling up the gas tank cost an average of $1.27 per litre, whereas it only cost approximately $1.01 per litre at pump stations in August of this year.

Although it has been leveling off in the past few months, the price of food, on the other hand, has risen since last year. The Canadian Press report indicates that food cost 4% more this past August compared to the same time a year ago. However, this is lower than the 5% and the 5.5% increase in food prices experienced in July and June of this year, as compared to last year, respectively.

So, it would appear as if the transportation industry is showing the most significant signs of having declining prices. In addition to lower gasoline costs, the price of vehicles had decreased by 4.7% in August as well.

Meanwhile, “household operations, furnishings and equipment, health and personal care, recreation, education and reading, and alcohol and tobacco all cost more in August than a year ago.”

Perhaps driving is safer than what was once thought, after all.