Canada’s annual inflation rate ticked back up in January to 1.9 per cent, Statistics Canada reported on Tuesday.
Prices got a full month-long effect of the federal government’s tax break but a spike in gas prices to start the year offset the government’s relief, with underlying inflation accelerating.
The agency reported prices at the pump jumped 8.6 per cent year-over-year, in large part because of a 25.9 per cent spike in Manitoba, with the province reintroducing its provincial gas tax after a temporary suspension through 2024.
Meanwhile, natural gas prices rose 4.8 per cent annually in January, with an increase in demand pushing prices higher in Ontario and Quebec from an oversupply a year ago, Statistics Canada said.
Restaurant food prices declined a record 5.1 per cent from a year ago, thanks to the tax break, while alcohol prices dropped 3.6 per cent from the same time last year. The temporary break, however, ended over the weekend.
Without the tax break, Statistics Canada said the annual inflation rate would have accelerated to 2.7 per cent, up from 2.3 per cent in December.
The annual inflation rate continues to face upward pressure from mortgage interest costs, increasing at a rate of 10.2 per cent from a year ago, though this is the 17th consecutive month of deceleration after a peak of 30.9 per cent in August of 2023.
(This report by The Canadian Press was first published Feb. 18, 2025)
