Food prices were expected to rise on a year-over-year basis because December 2024 restaurant prices had been lowered by the temporary GST holiday that ended in early 2025. (Photo by Zou Zheng/Xinhua via Getty Images) · Xinhua News Agency via Getty Images
Canada’s annual inflation rate picked up steam to 2.4 per cent in December, according to Statistics Canada data published Monday. The GST holiday that was introduced in December 2024 and brought prices down was a factor in the comparative rise, the agency said.
Financial industry observers had expected the inflation rate to remain in line with the 2.2 per cent rise recorded in November, according to consensus estimates published by BMO.
“Inflation is close enough to the [Bank of Canada’s] two per cent target for policymakers to be perfectly comfortable on the sidelines for now,” CIBC economist Andrew Grantham had written in a note Friday, ahead of the data release. “We expect inflation to dip below the two per cent target later this year as easing rent inflation uncovers some disinflationary pressure resulting from an economy that still has excess capacity.”
Economists expected lower gasoline prices than a year earlier to pull inflation down, while food prices were expected to rise on a year-over-year basis because December 2024 restaurant prices had been lowered by the temporary GST holiday that ended in early 2025. Grocery prices have also been “elevated,” RBC economists noted on Friday, with the annual rise in November 2025 at 4.7 per cent.
On a monthly basis, CPI fell 0.2 per cent per cent in December. Seasonally adjusted, CPI rose 0.3 per cent.
This story will be updated.
John MacFarlane is a senior reporter at Yahoo Finance Canada. Follow him on X @jmacf.
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