Inflation fell to 1.8% in February as tax holiday clouds data, says StatCan

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.

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The GST/HST tax holiday from December 2024 to February 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.

Statistics Canada said this base-year effect was concentrated in price changes for food purchased from restaurants, alcoholic beverages and toys.

The latest reading does not reflect the period since the start of the Iran war, which began on Feb. 28.

– More to come