Canada’s annual inflation rate edged down to 2.2% in April from 2.3% the month before, Statistics Canada reported today.

Analysts had expected inflation to come in a touch lower at 2.1%.

But the core inflation rate — which excludes volatile items in the consumer price index — rose to 2.5% from 2.3% in March. That’s its highest level in more than four years.

The year-over-year rise in the cost of living was driven by increases in housing costs, as prices for new homes rose and consumers paid more in mortgage interest. Health care services, water charges, clothing, and auto repairs all cost more.

Gasoline, for once, wasn’t a major culprit in the annual inflation rate, as prices at the pump were actually lower in April than they were a year earlier.

Natural gas was also cheaper year-over-year, as were computers and video equipment.

Food, however, cost more. Consumers paid 3.8% more for food than they did in April 2006. Fresh vegetables were 12.9% more expensive.

Alberta’s housing boom once again gave it the dubious honour of having the highest inflation rate in the country — 5.5%. Homeowners’ replacement costs in that province have shot up by more than 29% in the past year.

On a month-over-month basis, prices rose 0.4% from March to April — a marked slowdown from the 0.8% rise seen in the previous month. Prices for gasoline and natural gas rose in April; prices for non-alcoholic beverages and women’s clothing fell.

Analysts noted that the upward pressure on core inflation was broadly-based, suggesting that interest rate hikes may come later this year.

“Today’s result extends the underlying upswing in core inflation over the past year, a troublesome development for the Bank of Canada,” said BMO Capital Markets economist Doug Porter. “Look for the bank to drop any doubt about which way the risks are now — they are squarely tilted to the upside for inflation.”