Canada Taux d'inflation

The annual inflation rate in Canada jumped to 2.6% in February of 2025 from 1.9% in the previous month, the highest in eight months, sharply above market expectations of 2.2% and ahead of the Bank of Canada's forecast of 2.5%. The surge was mostly owed to the end of goods and services tax (GST) and harmonized tax (HST) breaks halfway through the period, triggering sharp increases in the price of eligible goods. Consequently, inflation slowed sharply for restaurants (-1.4% vs -5.1% in January) and alcoholic beverages from stores(-1.4% vs -3.6%), driving the food subindex to rebound sharply (1.3% vs -0.6%). Prices also rebounded for clothing and footwear (1.4% vs -1.3%) and accelerated for recreation, education, and reading (3.7% vs 1.9%). From the previous month, the end of tax credits drove the CPI to jump 1.1%, the most since May 2022.