TORONTO (AP) -- Canada's consumer price index rose above 3 percent for the first time in nearly three years as a result of increasing gas and food prices, the government said Wednesday.
Statistics Canada reported that the nation's annual inflation jumped to 3.1 percent in June from 2.2 percent the previous month, the biggest one-month leap since September 2005.
Prices last month were 0.7 percent higher than in May.
As in 2005 when hurricanes Katrina and Rita caused a spike in oil prices, rising energy costs fueled inflation in June.
The cost of filling up at gasoline stations rose by 26.9 percent from a year earlier, and by 5.8 percent from May.
Fuel oil rose 49.3 percent versus a year ago, the same pace as in May.
As had been predicted for several months, prices of store-bought food rose 3 percent on an annual basis on items such as baked goods, lettuce, milk and butter, said Statistics Canada. Food inflation was 1.9 percent in May.
Restaurant prices had the biggest run-up since the Goods and Services Tax was introduced in 1991, up 0.9 percent from the previous month.
"The bottom line is that Canadians just aren't sheltered from forces we're seeing around the world on food, partly because the Canadian dollar is no longer rising and cutting into import prices," said economist Douglas Porter of BMO Capital Markets.
But while food costs are forecast to rise further, consumers may have seen the worst of energy prices. The cost of a barrel of crude oil has declined by about $20 since spiking on July 11 at above $147 a barrel, which Porter said could show up in lower overall inflation in the months ahead.
The Bank of Canada forecast last week that inflation would rise steadily through the second half of 2008 and peak at 4.3 percent in the first quarter of 2009. This estimate was based on oil remaining above $140 a barrel. Oil was trading at about $126 a barrel Wednesday.