Economists predict there will be a half-point interest rate cut in the next week as Canada had its lowest inflation rate in more than a year.
The annual rate dipped to 1.4 percent in March from 1.8 percent a month earlier, marking the fourth consecutive monthly decline, Statistics Canada said.
Inflation in Canada "remains an oasis of calm amid raging global price pressures," said economist Pascal Gauthier of TD Bank.
Canadians are enjoying lower prices as a result of the stronger dollar that reached and exceeded parity with the U.S. currency.
This helped to dampen inflation by keeping prices of imported goods lower at a time of year when there are usually significant price increases.
Major factors in the decline were lower prices for cars, computers and fresh fruit and vegetables.
A 0.5-percent Bank of Canada interest rate cut would drop the key lending rate to 3.0 percent, the lowest since October 2005.
Former Liberal leader Corbeil arrested
Benoit Corbeil, a former federal Liberal organizer in Quebec, has been arrested in connection with the "sponsorship scandal" that led to his party's defeat.
Corbeil, director of the Quebec wing from 1999 to 2001, is accused of influence peddling, fraud and conspiracy.
He is charged with conspiring to defraud the Liberals of $100,000 by authorizing payment of false invoices and receiving a kickback in the sale of federal land to a private company.
Former ad agency executive Jean Brault, who was sentenced earlier to 30 months in prison for fraud, said he worked with Liberal officials to divert $1.1-million in cash to the party in exchange for sponsorship contracts for little or no work.
News in brief
• Mexican officials say a judge will rule Tuesday in the case of Canadian Brenda Martin, who has been held in prison near Guadalajara for two years. Martin, 51, was arrested in connection with an Internet fraud scheme run by her jailed ex-boss, Alyn Waage. Martin was a cook and knew nothing of the scheme, Waage said.
• Canada's top soldier, Gen. Rick Hillier, is retiring in July as chief of defense staff. Hillier said the public's "appreciation" of the Afghanistan mission is growing despite casualties. No successor has been named.
• Trendy footwear maker Crocs Inc. is closing its Quebec factory in July, putting 670 people out of work. Production will be moved to Mexico.
Facts and figures
Canada's dollar has advanced to 99.42 cents U.S., while the U.S. greenback dipped to $1.0058 Canadian on Friday, before bank exchanges fees.
The Bank of Canada's key interest rate is 3.5 percent while the prime lending rate is 5.25 percent.
Canadian stock markets moved higher with the Toronto Exchange index at 14,220 points and the TSX Venture Exchange at 2,562 points on Friday.
Lotto 6-49: (Wednesday) 13, 25, 34, 35, 47, 48; bonus 22. (April 12) 1, 13, 23, 35, 38, 42; bonus 22. Super 7: (April 11) 5, 9, 11, 22, 27, 41, 46; bonus 7.
• Toronto transit workers are threatening to go on strike Monday, stranding 1.5-million commuters. The 8,900 bus, streetcar and subway drivers and maintenance workers could be declared essential workers, as the province won't tolerate a long strike, Ontario Premier Dalton McGuinty said.
• The Nova Scotia government has launched an aggressive campaign to recruit health professionals. The province has targeted cities across the country, including all of Atlantic Canada, with ads aimed at luring doctors and nurses. One ad has a card resembling a prescription attached to newspapers.
Jim Fox can be reached at