Inflation continues to cool in Alberta but is still the highest in the country

Alberta's annual inflation rate was the highest in the country in October, according to new data released by Statistics Canada on Tuesday.

The national inflation rate, measured by the Consumer Price Index (CPI), rose to two per cent since the same time last year, while Alberta's came in at three per cent.

Its two major cities, Calgary and Edmonton, also had the highest rates in comparison to other urban centres in the country, at 3.3 per cent and 2.9 per cent, respectively.

The numbers show that inflation continues to cool in Alberta it spiked to 4.2 per cent in February but the province's rate remains above the national average.

Economist Charles St-Arnaud, with Alberta Central, says several factors could be responsible for the discrepancy, the first being gas prices.

While Alberta experienced an increase this year, gas prices elsewhere in the country were slightly lower this October than the same time last year, said St-Arnaud.

"So obviously in one case you have a small drag on inflation nationally, but in Alberta higher gasoline prices were pushing inflation higher."

Patrick De Haan, head of petroleum analysis at GasBuddy, said in an e-mail to CBC News that one cause of rising gas prices in Alberta is the province's gas tax policy.

Under the policy, the 13-cent fuel tax was fully reinstated in October as West Texas Intermediate oil prices dropped below $80 US a barrel.

"That's the bulk of it," said De Haan.

"That's why you're paying more when everyone else isn't."

Housing prices are the biggest contribution to Alberta's inflationary rate overall, said St-Arnaud, and could also play a role in making the province's rate higher than the national average.

WATCH |Calgary sees highest inflation rate increase among major Canadian cities:

Calgary sees highest inflation rate increase among major Canadian cities

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Canada's inflation rate rose to two per cent in October, according to the latest data from Statistics Canada. Calgary had the highest rate among major cities in the country, while Alberta's rate was the highest of any province.

While property taxes have increased across the country, homeowners insurance in Alberta is slightly higher, said St-Arnaud. Utility costs, particularly electricity and natural gas, also remain high.

From October 2023 to this October, shelter costs in Alberta jumped 5.6 per cent, according to the CPI report.

Giacomo Ladas, the director of communications at Rentals.ca, said thatincrease in shelter costs is predominantly because demand for affordable housing in Alberta continues to outpace supply.

"We are starting to see people really change their lifestyle in order to find affordable housing," said Ladas.

"And that means leaving the place that you want to call home. So that's not really the solution. We need more supply and we need it pretty quickly."

Increasing that supply is one piece of solving the housing problem, said Ladas, but so is making it more affordable for developers to build.

St-Arnaud said the province's inflation numbers aren't anything to be particularly concerned about, but he notes they will continue to impact Albertans' bottom line.

"Our cost of living is increasing at a faster pace than the rest of the country," he said.

"So considering that we've also had for most of the past few yearsunder-performing wageincreases, that means that our purchasing power is not catching up in recent months."