Canada’s inflation rate ticks back up to 1.9%

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Energy prices were 5.3 per cent higher than last January, driven by increases for gasoline and natural gas. Prices at the pump increased 8.6 per cent on a year-over-year basis, with the province of Manitoba reporting the biggest jump due to the reintroduction of the provincial gas tax that was suspended in 2024. Natural gas prices rose 4.8 per cent in January over last year and six per cent on a monthly basis, with British Columbia reporting the biggest increase.

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January inflation accelerated from the 1.8 per cent increase recorded in December despite downward pressure on prices due to the temporary GST/HST break introduced by the federal government in mid-December. Overall food prices declined by 0.6 per cent, the first yearly decline since May 2017, driven by a decline in the price of food purchased in restaurants, which fell by 5.1 per cent. Prices for alcoholic beverages purchased in stores, meanwhile, declined by 3.6 per cent in January. The tax holiday ended on Feb. 15.

Excluding the impact of the temporary tax break, the consumer price index was up 2.7 per cent in January, down slightly from 2.9 per cent recorded in January 2024.

Core inflation, the measures the Bank of Canada prefers to look at when making its monetary policy decisions, accelerated from December. CPI-common was up 2.2 per cent year-over-year in January, compared to two per cent the month before. CPI-median rose 2.6 per cent a year-over-year basis, compared to 2.5 per cent in December. CPI-trim was up 2.7 per cent last month, after it rose 2.5 per cent in December.

Shelter inflation was up 4.5 per cent in January, the same as the month before, while new passenger vehicle prices rose 2.3 per cent, compared with a 0.9 per cent increase in December.

• Email: jgowling@postmedia.com

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