Consumer inflation cooled to 1.8 per cent in February compared to a year earlier, when the federal GST/HST tax holiday led to lower prices for many consumer goods and services.
The Consumer Price Index released Monday from Statistics Canada was 0.5 percentage points less than the annualized inflation rate of 2.3 per cent in January.
With the Iran war impacting global economies, including Canada, principal economist Andrew DiCapua at the Canadian Chamber of Commerce said the lower inflation reading “is the dip before the spike.”
“There are some encouraging detail in the inflation data, with broad-based price pressures easing, particularly in services and in core measures that look past the distortions from last year’s GST/HST break. But the picture will not stay this calm for long,” said DiCapua in a statement.
“Rising tensions in Iran have pushed gasoline prices higher in recent weeks, and that’s likely to show up in the next inflation print.”
The latest reading does not reflect the period since the start of the Iran war, which began on Feb. 28. Although gas prices did start to creep higher by the end of the month, economists say those higher prices will result in higher inflation figures in the months to come.
The GST/HST tax holiday from Dec. 14, 2024, to Feb. 15, 2025, created a base-year effect, the agency said, which means year-over-year price comparisons may cloud the underlying trend of where prices are heading for consumers.
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Lower prices from the tax break were only in effect for half of February last year compared with all of January, making the annual inflation calculations somewhat better last month.
Statistics Canada said this base-year effect was concentrated in price changes for food purchased from restaurants, alcoholic beverages and toys.
Inflation on food purchased from stores cooled to 4.1 per cent in February from 4.8 per cent the month previous. Fresh and frozen beef – long a pain point at the grocery store – saw its annual price hike cool to 13.9 per cent last month, nearly five percentage points lower than in January.
A month-over-month decline in the prices of cellular services also helped drive the annual inflation rate lower in February.
Monday’s report comes ahead of the Bank of Canada‘s next interest rate announcement on Wednesday.
– with files from The Canadian Press
There two type’s of Trump supporters
Billionaires and idiots !!!
Check your bank balance to see which one you are.
There two type’s of Carney supporters
Billionaires and idiots !!!
Check your bank balance to see which one you are.
More gaslighting of Canadians by the Carney government. Anyone who lives in the REAL world knows that prices are highly inflated already and the 1.8% inflation is based on the already highly inflated prices. So the actual prices paid are way above what they should be. Nice try Carney, but most Canadians have seen your sleight of hand already.
So how can the inflation rate be down when prices are going up especially on food every week
“Prices are rising slightly less fast, elbows up!”
Dear Conservatives whining about inflation and higher taxes… Get a job!!