Canada’s annual inflation rate rose to 1.4% in November from 0.9% in October as housing costs rose and the effect of recent downward pressure from lower gasoline prices began to wear off.

Statistics Canada said prices at the gas pumps dropped just 3.1% between November 2005 and November 2006. That compares with drops of more than 14% during the previous two months.

Homeowners’ replacement costs, which represents the cost of new housing (excluding land), was also a big contributor to the annual rise in the Consumer Price Index. Alberta was the big factor here. Its new housing costs have soared by more than 45% in the past year. Alberta again led all provinces with an annual inflation rate of 3.7%.

Mortgage interest costs had their largest increase in more than five years. “It was also the first time since March 2003 that interest rates have exerted a positive influence on the rise in mortgage interest cost,” StatsCan said.

On a monthly basis, consumer prices rose 0.2%. Rising automobile prices accounted for much of that gain as November is the month when dealers introduce their 2007 models.

The core rate of inflation, which excludes the most volatile items like fuel and fresh produce, edged down a 10th of a percentage point to 2.2%. On a monthly basis, core prices rose 0.3%.

The core inflation rate came in slightly higher than economists’ expectations of 2.1%, while the so-called “headline” rate was slightly lower than the 1.5% expected.