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Canada’s annual inflation rate ticked up to 2.4 per cent in December compared to the same period last year, when the federal government implemented a GST break that brought some prices down, Statistics Canada said on Monday.
The temporary tax cut, which began on Dec. 14, 2024, lasted for two months. But it continued to reverberate through monthly inflation data until last month, when it fell out of the year-over-year movement and price growth accelerated, according to the data agency.
December’s rate was a smidge higher than the 2.2 per cent rate seen in November. It was partly offset by a year-over-year decline in gas prices. With energy excluded, inflation rose to three per cent in December (after a 2.6 per cent jump in November).
Grocery price growth was unchanged between November and December but rose to five per cent when compared to the same time last year, with coffee and fresh or frozen beef still driving the increase.
Prices for travel tours fell 3.2 per cent in December compared to the same period last year, while the price of air transportation fell 0.8 per cent.
While StatsCan notes that transportation prices usually rise during the holidays, the rate increased 34.5 per cent in December compared to November — larger than previous increases during the final month of the year.
The Bank of Canada watches measures of core inflation, which strip out volatile elements like gas prices or tax-related changes from the data. Two of those measures fell in December.
Inflation rose 2.1% on annual average basis
In tandem with December’s inflation report, Statistics Canada also released its annual review of consumer prices for 2025. Inflation rose 2.1 per cent on an annual average basis last year, after a 2.4 per cent increase in 2024.
With energy excluded, prices rose 2.6 per cent in 2025, the same as the year before.
Grocery prices grew at a faster pace, while the growth rate for shelter prices slowed.
