Calgary Alberta Mortgage and Real Estate News

Edmonton’s fast-growing regional economy continues to outstrip the performance of every other major Canadian city except one: Calgary.

Those are the findings of CIBC World Markets’ latest Metropolitan Economic Activity Index, which shows Edmonton holding down second spot behind its perennial provincial rival.

CIBC’s index — which measures the rate of positive economic momentum in Canada’s 25 largest urban centres by tracking nine key local indicators — shows that Edmonton’s red-hot economy continues to accelerate.

Since the spring, Edmonton has leapfrogged seven major Canadian cities in CIBC’s semi-annual rankings, including Ottawa-Gatineau, Toronto, Vancouver, Hamilton, Kitchener, Kingston and Victoria.

And with energy prices expected to remain robust, Edmonton is likely to remain near the top of the national rankings in the year ahead.

“To what extent Edmonton will be able to maintain its position as number two is very difficult to predict, but I think it will be right up there,” says CIBC economist Benjamin Tal, the report’s author.

“I think in 2007 we’ll continue to see strong momentum in both Calgary and Edmonton, and less momentum in Toronto and Ottawa. So it’s not just that Edmonton, in absolute terms, will be great. It’s that these other cities may not do as well,” he says.

Vancouver is also expected to experience more sluggish growth in 2007, Tal predicts, as West Coast real estate activity slows in response to sky-high house prices and reduced affordability.

Vancouver and Toronto tied for fourth spot in CIBC’s latest rankings, with a composite index score of 21.9. That’s a hair behind Ottawa-Gatineau, and comfortably ahead of both Montreal and Victoria.

Top-ranked Calgary easily led the nation with an index score of 33.5. Runner-up Edmonton scored 22.2, and Ottawa-Gatineau came third, at 22.0. Hamilton, Sherbrooke and Quebec City round out the top-10 rankings, with Thunder Bay, Regina and Sudbury bringing up the rear.

“I think Vancouver will continue to do relatively well because of the 2010 (Winter) Olympics,” says Tal. “At the same time, Vancouver is becoming extremely expensive.

” One of the reasons it has been losing momentum is the slowing housing market. I think it will get worse in 2007, and that will limit growth.”

CIBC’s index scores reflect nine key variables, including population growth rates, employment levels, personal and business bankruptcy rates, housing starts, MLS (Multiple Listing Service) housing resale levels and non-residential building permits, among other things.

Calgary led the nation in population and employment growth for the latest period, while posting the country’s lowest unemployment rate.

Edmonton’s lofty ranking reflects its rapid population growth as well as its low unemployment rate and robust housing market.

Ottawa-Gatineau topped CIBC’s rankings in the previous survey, slightly ahead of Calgary. Edmonton held down ninth spot.

CIBC’s upbeat outlook for Alberta’s two major cities is echoed by Warren Jestin, Scotiabank Group’s chief economist, who was in Edmonton Wednesday. Jestin expects Alberta to comfortably lead the nation again in 2007, with economic growth pegged at nearly five per cent.

As it has in 2005, British Columbia is expected to hold down second spot, with growth approaching four per cent, while Ontario and Quebec struggle to eke out growth rates of about two percent.

“Substantial regional performance differentials will persist during 2007 as energy and industrial commodity markets are driven by burgeoning Asian demand, with China growing by close to 10 per cent,” Jestin writes in his report.

“The commodity-related boost to incomes and job creation will keep Alberta and B.C. on the fast track and at the top of the provincial population growth charts.” he adds.

“These two provinces, which together match Quebec in population and exceed its GDP (gross domestic product) by more than 40 per cent, will probably grow by nearly twice the pace recorded in Ontario, Quebec and the Maritimes.”

Geez, we’re getting popular. With the Edmonton region’s economy on wheels, the city is being courted as never before by visiting business groups.

Last week, Sandra Pupatello, Ontario’s minister of economic development and trade, led a three-day visit to town involving some 30 Eastern manufacturers, all of whom are eager to get in on the action in Alberta’s booming oilsands.

Next week, Vancouver Island’s Comox Valley Economic Development Society will head a blitz of the city from Dec. 6 through Dec. 8, involving 45 business leaders, realtors and tourism reps.

The visit is aimed at boosting tourism and business ties between Edmonton and the Vancouver Island community, while highlighting WestJet’s new direct service to Comox Valley International Airport.

Nov. 27 (Bloomberg) — Canada’s dollar increased, extending gains from last week, as crude oil and gold prices advanced.

“Slightly firmer base metals prices, together with crude oil trading around $60 a barrel, should provide some support for the Canadian dollar,” said Matthew Strauss, senior currency strategist at RBC Capital Markets in Toronto.

The currency rose the most in two weeks on Nov. 24 after the Canadian Finance Ministry said it will post a surplus double the previous forecast. Investors sold the U.S. dollar on concerns the world’s largest economy was slowing.

Canada’s dollar rose to 88.28 U.S. cents at 11:43 a.m. in Toronto, from 88.13 U.S. cents on Nov. 24. One U.S. dollar buys C$1.1328.

Crude oil rose in New York on forecasts that most of the U.S. will be colder than normal next week and on a report that Saudi Arabia’s oil minister said OPEC may cut output at a meeting next month.

Crude oil for January delivery rose 49 cents, or 0.83 percent, to $59.73 a barrel on the New York Mercantile Exchange. Prices are up 4.1 percent from a year ago.

The Canadian dollar tends to follow the price of commodities, which account for about 54 percent of the nation’s exports and 12 percent of its C$1.09 trillion economy.

Traders said the Canadian dollar is weakening against European currencies because a slowdown in the U.S. may also hurt Canada, which ships more than 80 percent of its exports to the U.S. The Canadian dollar touched an almost-15-month low against the euro today, when it traded at 67.41 euros, the lowest since September 2005.

‘The Same Brush’

“You still have the Canadian dollar being painted with the same brush as the U.S. dollar,” said Jonathan Gencher, vice president of foreign exchange sales at BMO Capital Markets in Toronto. “Canada still wants to lag against the euro.”

Canada’s economic growth will dip to 2.5 percent next year from 2.8 percent this year and return to 2.8 percent in 2008, according to the Bank of Canada’s Oct. 19 monetary policy report.

The central bank kept its key interest rate unchanged at 4.25 percent for the third-straight meeting on Oct. 17, after seven consecutive increases from September 2005 to May.

The 12-nation euro extended gains before reports this week that will probably show faster inflation, prompting traders to bet the European Central Bank will lift rates at least twice more. French Finance Minister Thierry Breton said European finance ministers will discuss the euro’s 10.8 percent gain versus the U.S. dollar this year at meetings today and tomorrow.

The yield on Canada’s benchmark 10-year note was little changed at 3.96 percent. The price of the 4 percent security maturing in June 2016 rose 1 cent to C$100.29. Bond yields move inversely to prices.

Canadian 10-year government bonds yielded about 59.75 basis points less than comparable-maturity U.S. Treasuries. The difference was 77 basis points in May, the largest this year.

Nov. 27 (Bloomberg) — The Bank of Canada will study whether to adopt a stricter inflation target than the current 2 percent, which may include lowering the target rate or setting a new `price-level’ goal to make up for past misses.

The present target for the consumer price index, which was renewed Nov. 23 until the end of 2011, means the cost of living doubles every 35 years, the central bank said in a background paper released in Ottawa today. A tougher target could better protect Canadians against inflation without imposing major costs on the economy, the Bank of Canada said.

“This research is at an early stage,” the paper said. “The Bank, therefore, plans to lead a concerted research effort over the next three years.”

The central bank will start allowing for cases where it can set interest rates to return inflation to target sooner or later than the current deadline of six to eight quarters. The Bank of Canada will publicize if there are situations such as a surge in asset prices where it is better to take longer to reach the target, or if low inflation means it can be done faster.

TORONTO, Nov 27 (Reuters) - The Canadian dollar edged
higher against the U.S. dollar on Monday, as the greenback
continued to face heavy selling versus higher-yielding overseas
currencies.
Domestic bond prices softened alongside U.S. treasuries, as
market volumes slowly ramped up after last week’s U.S.
holiday-related sluggishness.
At 9:40 a.m. (1440 GMT), the Canadian dollar was at
C$1.1331 to the U.S. dollar, or 88.25 U.S. cents, up from
C$1.1357 to the U.S. dollar, or 88.05 U.S. cents, at Friday’s
session close.
The Canadian dollar touched a two-week high against the
U.S. dollar, which continued to be stung by concerns about
potential U.S. rate cuts and central banks diversifying their
reserves out of the U.S. currency.
Against European currencies such as the euro and the
British pound, the Canadian dollar has been steadily weaker, a
trend that is expected to continue as traders take a dim view
of expected interest rate cuts eventually in Canada and the
United States.
“Canada hasn’t actually moved all that much overnight relative to the other markets, and I think that theme of underperformance of the Canadian dollar is one that sticks with us for while,” said Shaun Osborne, chief currency strategist at TD Securities.
The euro’s rise was cooled on Monday by comments from
French Finance Minister Thierry Breton that vigilance would be
needed on the U.S. dollar’s weakening and that the euro would
be discussed with EU finance ministers later in the day.
Last week’s sharp moves came in thin trading, with U.S.
markets closed on Thursday for Thanksgiving.
With trading volumes rebounding on Monday, the market’s
focus is expected to turn towards economic data.
In Canada, the highlight will be third-quarter current
account data due on Wednesday, followed by third-quarter
economic growth data on Thursday, and November jobs data to
finish the week. U.S. traders will also sift though a thick
stack of reports.
BONDS EASE
Domestic bond prices eased in sympathy with U.S.
treasuries, as dealers gave back some recent gains ahead of a
heavy dose of economic reports due this week.
The two-year bond declined 7 Canadian cents to C$100.55 to
yield 3.963 percent, while the 10-year bond slipped 14 Canadian
cents to C$100.14 to yield 3.981 percent.
The yield spread between the two-year and 10-year bond
moved to 4.4 basis points from 3.6 at the previous close.
The 30-year bond slid 42 Canadian cents to C$127.05 to
yield 4.072 percent. In the United States, the 30-year treasury
yielded 4.677 percent.
The three-month when-issued T-bill yielded 4.18 percent, up
from 4.17 percent at the previous close.

Nov. 14 (Bloomberg) — Canadian stocks fell as commodity producers including Teck Cominco Ltd. and Goldcorp Inc. declined with prices of industrial metals and bullion.

Losses in the market were limited as data showing easing inflation prompted a rally in financial shares and raised speculation the Federal Reserve may cut interest rates next year.

The Standard & Poor’s/TSX Composite Index slipped 17.23, or 0.1 percent, to 12,292.17 as of 11:23 a.m. in Toronto.

A measure of raw-materials producers dropped for a third straight day, losing 1.6 percent.

Teck Cominco plunged C$1.55 to C$80.47. The world’s biggest zinc producer is seeking local partners to explore for zinc, copper and gold in China to tap rising demand for metals.

First Quantum Minerals Ltd., a miner of copper in Africa, slid C$3.94 to C$53.09.

Lead declined for a third consecutive trading session in London, leading other metals including copper and zinc lower, on speculation last week’s rally to a record was exaggerated as supply grew.

Goldcorp, Canada’s second-largest bullion miner, lost 36 cents to C$31.63. Barrick Gold Corp., the world’s biggest, eased 24 cents to C$33.33.

Gold futures for December delivery were trading 0.8 percent lower at $621 per ounce in New York.

Banks Gain

A gauge of financial stocks, the biggest by value in the S&P/TSX, increased 0.4 percent.

Prices paid to U.S. producers fell 1.6 percent in October, matching the biggest monthly decline on record, as energy costs and motor vehicle prices dropped, suggesting inflation pressures are abating, according to a report from the Labor Department in Washington. The decrease followed a 1.3 percent drop in September, the first back-to-back decline since July 2004.

Excluding food and energy, the so-called core rate fell 0.9 percent last month, the biggest decline since 1993, after rising 0.6 percent. Economists had expected a 0.1 percent gain.

Retail sales fell a less-than-expected 0.2 percent after a revised 0.8 percent decline in September that was larger than originally reported, the Commerce Department said in Washington. Purchases excluding gasoline rose 0.4 percent. Economists expected retail sales to fall 0.4 percent.

The reports suggested the Fed may be succeeding in keeping inflation in check without choking off growth following its decision to keep borrowing costs on hold at 5.25 percent since June.

Interest-Rate Futures

Interest-rate futures show traders see a 45 percent chance the central bank will cut its benchmark rate a quarter-percentage point to 5 percent by the end of March, compared with a 23 percent chance yesterday.

Royal Bank, the nation’s biggest lender by assets, added 52 cents to C$53.05. Canadian Imperial Bank of Commerce, the fifth- largest, was up 64 cents at C$90.22.

Sun Life Financial Inc., Canada’s second-biggest insurer, rose 42 cents to C$48.64.

Lower borrowing costs boost the value of bonds owned by banks, brokers and insurers, and increase demand for mortgages and loans.

The following shares were having unusual price changes in Canadian markets. Stock symbols are in parentheses.

Alamos Gold Inc. (AGI CN) dropped 44 cents, or 4.1 percent, to C$10.27. The Toronto-based bullion miner said it had fiscal third-quarter profit of C$835,000 ($734,200) on record bullion output after its Mulatos mine began producing on April 1. That compares with a C$2.45 million loss a year earlier. Per-share earnings of 1 cent fell short of the 3 cents average estimate of five analysts in a survey by Thomson Financial, which doesn’t disclose the parameters of the forecasts.

Skye Resources Inc. (SKR CN) plunged C$4.05, or 24 percent, to C$13.05. The mining exploration company said in a statement today that it would go ahead with developing its Fenix nickel project in Guatemala, after unsuccessfully exploring alternatives including a sale of the company. Earlier, Skye reported its loss for the nine months ended Sept. 30 widened by 36 percent to C$24.4 million from C$17.9 million, due mainly to expenses related to Fenix.

Core inflation rose to its highest point in 41 months in October, but a closer analysis of the regional dynamics behind the national inflation rate suggests the Bank of Canada should think about cutting its key interest rate soon, economists say.

The annualized core inflation rate, which excludes the most volatile prices such as energy and food, touched 2.3 per cent in October, the highest point since May, 2003. But the inflation picture looks much more benign when Alberta housing prices are excluded. Calculations by National Bank Financial Inc. peg the core inflation rate, excluding Alberta housing, at a peaceful 1.8 per cent.

“In our opinion, this development argues for a great deal of caution for the future conduct of Canadian monetary policy,” writes NBF economist Stéfane Marion. “Core [inflation] may be trending up in Canada but our central bank should not be setting interest rates in response to a relative price change in one province.”

Rather, since economic growth has slowed down quickly in the second and third quarter in Canada, and will likely remain lacklustre in the fourth quarter, the central bank should be prepared to cut rates in 2007, Mr. Marion argues.

Total inflation in October was up a relatively low 0.9 per cent compared with a year earlier, but that’s mainly because energy prices were sky-high back then, in the wake of hurricane Katrina.

The Bank of Canada is probably paying far more attention to the core inflation rate than the total inflation rate, economists said, and core is poised to be higher than the central bank had expected in coming months. The bank has projected an average core inflation rate of 2.1 per cent in the fourth quarter, but on the heels of yesterday’s 2.3-per-cent rate, many economists are calling for a peak well above 2.1 this quarter.

The central bank’s official inflation goal is to keep the rate within a band of 1-to-3 per cent, but bankers have made it clear they are uncomfortable with inflation that hovers above the 2-per-cent point.

But while high numbers in the next few months will likely raise the blood pressure of central bankers, the bank should keep in mind that economic growth is slowing, especially in Central Canada, said Doug Porter, deputy chief economist at BMO Nesbitt Burns Inc.

Not all economists foresee lower rates on the horizon.

Ted Carmichael, chief economist at J.P. Morgan Securities Canada Inc., predicts a weakening dollar, will drive up inflation, and prompt the central bank to raise rates.

Nov. 23 (Bloomberg) — The Bank of Canada renewed an agreement with the federal government to target annual inflation at 2 percent over the next five years.

The agreement was announced by the central bank and the federal government, according to a statement in Ottawa today. The last agreement was for five years and was due to expire Dec. 31.

Bank of Canada Governor David Dodge has said in the past year that the system would be renewed with few changes because it works well and helps him explain monetary policy to the public. Inflation has averaged 2.1 percent since the Bank of Canada adopted targets in February 1991, compared with an average of 6.9 percent during the previous 15 years, according to Bloomberg figures.

“It’s working like a charm,” Don Drummond, chief economist at Toronto-Dominion Bank, said in a Nov. 20 interview. “Even when the oil prices were soaring inflation never wandered very far away from 2 percent. The actual record has been a piece of magic.”

Canada’s central bank will aim to keep inflation at 2 percent as much as possible, and always between 1 percent and 3 percent. To judge future price trends, the central bank will rely on a core inflation index that excludes eight volatile items such as fruit and gasoline and tax changes such as July’s federal sales-tax cut.

Policy makers on Oct. 17 kept the benchmark interest rate unchanged at 4.25 percent, where it’s been since May after seven consecutive quarter-point increases. The central bank’s Governing Council cut its economic growth forecast in October because of weak U.S. demand and a high Canadian dollar that will slow exports.

Set Rates

The Bank of Canada can influence economic growth and inflation by raising the target rate for overnight loans between commercial banks. The overnight target influences the prime rate that commercial banks charge their best customers.

Canada in 1991 became the second country with a numerical goal for inflation, after New Zealand. Since then, more than 20 central banks including the European Central Bank and the Bank of England have followed suit. U.S. Federal Reserve Chairman Ben S. Bernanke also has expressed some support for establishing an inflation target.

Canada’s target may not deserve much credit for slower inflation, J.P. Morgan Securities economist Ted Carmichael wrote in an April paper. Globalization reduced prices of goods worldwide, Carmichael wrote, and Canadian governments cut spending to pare deficits, curbing domestic demand.

Either way, lower inflation and interest rates have boosted Canada’s economy. Mortgage rates fell to the lowest in a half- century in 2005, fueling record consumer spending that has led economic growth for several years.

The country’s benchmark rate has been below the U.S. Fed funds rate since March 2005. Since 1961, the Bank of Canada rate has averaged 1 percentage higher than its U.S. equivalent, according to forecasting firm Global Insight.

Lower Target

Former Bank of Canada Governor John Crow and researchers at the nonpartisan C.D. Howe Institute have said Canada should adopt a tougher inflation target. The 2 percent annual inflation rate means a dollar loses two-thirds of its purchasing power over 30 years, C.D. Howe researchers wrote in a 2004 book.

The Bank of Canada considered a lower inflation target while it was reviewing the policy, and there wasn’t the “strong evidence” required to justify such a change, Dodge said in March.

An inflation target set too close to zero can lead to periods of deflation in times of economic crisis, the International Monetary Fund said in its semi-annual World Economic Outlook published April 13. Getting an economy out of a period of deflation can be much harder than slowing inflation, because central banks can’t set interest rates lower than zero to fight a widespread decline in prices.

TORONTO (Reuters) - The Canadian dollar raced higher against the U.S. dollar on Wednesday as above-target core inflation for October appeared to convince the market that the Bank of Canada may delay any potential interest rates cuts.

Domestic bonds prices tilted a touch lower after the inflation figures but clawed their way back shortly after and were mostly unchanged.

At 8:15 a.m. (1315 GMT), the Canadian unit was at C$1.1406 to the U.S. dollar, or 87.67 U.S. cents, up from C$1.1457 to the U.S. dollar, or 87.28 U.S. cents, at Tuesday’s close.

The Canadian dollar had reached as high as C$1.1402, or 87.70 U.S. cents, immediately after the report from pre-data levels around C$1.1435, or 87.45 U.S. cents.

Falling energy prices helped keep annual inflation in Canada under 1 percent for the second straight month in October but the core rate watched by the Bank of Canada stayed steady at 2.3 percent, above its target.

That is above the central bank’s target for core inflation at the midpoint of a 1 percent to 3 percent range.

And even though the Bank of Canada was not expected to alter its overnight rate until well into next year, the data helped prop up the Canadian dollar as it suggested an interest rate cut could take longer than anticipated.

“The immediate impact has been quite positive for the Canadian dollar and that’s largely because it shows that inflation is not completely dormant in Canada,” said David Watt, economist at BMO Capital Markets.

“We’re not going to get into any talk about Bank of Canada hiking rates but it certainly cuts off, for at least a little while, any talk that the Bank of Canada is going to be considering cutting rates anytime soon.”

The Bank of Canada’s overnight rate is steady at 4.25 percent, while the U.S. Federal Reserve’s fed fund rate remains at 5.25 percent. Both central banks have held monetary policy steady at their last three meetings.

With markets south of the border thinned out ahead of the U.S. Thanksgiving holiday on Thursday, traders have taken their lead from Canadian data and commodity prices all week.

Oil prices eased near $60 after a decent rally earlier in the week due partly to the disruption of Alaskan crude exports. Gold prices were steady.

BONDS LITTLE CHANGED

The domestic inflation data weighed slightly on domestic bond prices, but they quickly recovered the lost ground and were mostly unchanged.

“There was a very small sell-off immediately after the data release but it’s actually come back slightly,” said Kwan.

The two-year bond was down 2 Canadian cents at C$100.58 to yield 3.947 percent, while the 10-year bond was down 3 Canadian cents at C$100.02 to yield 3.997 percent.

The yield spread between the two-year and 10-year bond moved to 5.2 basis points from 5.9 at the previous close.

The 30-year bond fell 3 Canadian cents to C$126.95 to yield 4.077 percent. In the United States, the 30-year treasury yielded 4.663 percent.

The three-month when-issued T-bill yielded 4.17 percent, unchanged from the previous close.

OTTAWA — A new report says Alberta and Nunavut experienced the strongest growth in hours worked between 2000 and 2005, while the Northwest Territories and Newfoundland and Labrador registered the highest gains in labour productivity.
The Statistics Canada report says hours worked in Canada grew an average of 1.5 per cent a year over the period, due partly to a 44 per cent growth in hours worked in the construction, retail trade, finance and insurance sectors; that’s equivalent to some 120,000 jobs annually.
The country as a whole averaged 1.1 per cent labour growth over the same period.
Construction hours ranked No. 1 in Alberta, British Columbia, Prince Edward Island and the Yukon; second in Ontario and Newfoundland and Labrador, and third in Nova Scotia and Quebec.
Retail trade was the prime contributor to the growth in hours worked in Newfoundland and Labrador and Quebec; it stood second in New Brunswick and the three Prairie provinces, and third in Ontario and the Yukon.
Hours worked in three other industries — administrative and support services; professional, scientific and technical services; and health care and social assistance — also grew substantially over the period, averaging more than 127 million hours a year, equivalent to 76,000 jobs annually.
Agriculture continued its downward trend with an average loss exceeding 8,000 jobs a year, or nearly 18 million hours, with losses particularly severe in Prince Edward Island and the Prairies.

OTTAWA — Canada’s overall annual inflation rate crept up to 0.9 per cent in October, from 0.7 per cent in September, as lower fuel prices mostly offset other cost increases.
Statistics Canada said it was the first time since March 2004 that headline inflation recorded consecutive months below one per cent.
Alberta, with its red-hot economy, bucked the national trend with higher, but declining inflation. Overall, the province had three per cent inflation in October, compared to 3.7 per cent in September.
In the two big cities, Edmonton’s inflation rate slipped to 1.9 per cent, compared to 2.3 per cent in September. Calgary’s rate was 4.2 per cent in October, down from 5.1 per cent in September.
Nationally, other measures of inflation were higher.
With energy taken out of the mix, year-over-year inflation was at 2.0 per cent.
And the core consumer core price index — which ignores volatile factors such as energy and food, and is used by the Bank of Canada to monitor its inflation control — was 2.3 per cent higher than in October 2005.
The statistics are being buffeted by turbulent energy prices, observed Aron Gampel, deputy chief economist at Scotiabank.
“The overall inflation is being completely sideswiped by these wide swings in energy prices,” he said.
“You just buckle your seatbelt and go onwards and upwards because … who knows where they’re going to go?”
He said as the price index moves away from the huge energy cost increases a year ago in the wake of Hurricane Katrina, the numbers change dramatically.
“Energy prices are coming down, the total index now looks to be getting back into low single digits on a year-over-year basis, where the underlying trends are still probably at relatively high levels compared to recent years.”
Andrew Gretzinger, senior economic analyst at MFC Global Investment Management in Toronto, said the rise in core inflation “suggests that underlying demand remains pretty good.”
However, “I think inflation has crested,” Gretzinger added.
“I think it will slowly tick lower in the months ahead as activity, especially in Quebec and Ontario, slows.”
There were several upward price pressures, Statistics Canada reported.
Homeowners’ replacement cost, based on new housing prices, rose 8.8 per cent between October 2005 and October 2006. That increase was largely driven by a 48.3 per cent jump in Alberta.
Mortgage interest cost rose four per cent, the largest 12-month increase since May 2001.
And electricity prices rose 6.9 per cent year-to-year.
But prices for natural gas, heating oil and computer equipment and supplies all fell.
The natural gas index was down 16.4 per cent from October 2005, with Alberta recording a 37.7 per cent drop, as rising gas inventories pushed down prices.
The average cost of heating oil and other fuels was also down on an annual basis, with Quebec, Ontario and Nova Scotia recording double-digit drops.
The cost of computer equipment and supplies fell 19.9 per cent.