Higher gasoline prices and a rise in electricity rates in Ontario helped push the annual inflation rate up to 1.6% in April, Statistics Canada said today.

In March, Statistics Canada’s consumer price index was only 0.7%.

Gasoline prices were up almost 7% year-over-year in April, while electricity costs were up 15%. StatsCan said the most significant factor in the jump in electricity price was a 54.7% increase in Ontario’s electricity index.

An electricity refund legislated by the Ontario government sent the province’s power costs down in April 2003 and made the April 2004 index higher by comparison. Recent legislation also replaced the flat rate for electricity with a tiered rate beginning in April 2004.

The April inflation rate jumped not only due to higher energy prices, but also because of a decline in energy costs for the comparable period last year.

The core inflation rate, which excludes the eight most volatile components identified by the Bank of Canada, rose to 1.8% from April 2003 to April 2004, up from 1.3% in March.

The core rate is closely watched by the Bank of Canada, which aims to keep it around 2%.

The jump in the core rate makes it more likely that the central bank will hike interest rates with its next scheduled announcement June 8.

Other factors driving up inflation in April were higher costs for housing, cigarettes and tuition fees.

Meanwhile, consumers paid less for automotive vehicles, computer equipment and supplies, natural gas and fresh vegetables.