The inflation rate in Canada declined to an annualized 1.8% in February, down from 2.3% in January of this year.
The February inflation reading is below the Bank of Canada’s 2% annualized target and is likely to give the central bank more leeway to reduce interest rates and bolster the economy.
However, Statistics Canada said the February inflation decline was largely due to a tough comparison from a year earlier.
In February 2025, consumer prices in Canada rose sharply as a GST/HST tax holiday across the country came to an end.
Inflation this February also fell as food purchased from restaurants decreased, along with prices charged for alcoholic beverages.
Downward pressure on inflation this February was also exerted by a steep decline in gasoline prices (down 14.2%), natural gas (down 17.1%), and travel tours (down 3.1%).
Also, cellular service prices rose less year-over-year in February (up 1.5%) than in January, when they rose 4.9%.
The deceleration in cellular service prices was driven by lower-priced plans from multiple wireless service providers throughout Canada.
The Consumer Price Index (CPI) in Canada was up 0.5% month-over-month between January and February of this year.
On a seasonally adjusted monthly basis, the CPI increased 0.1%, said Statistics Canada.
