The Consumer Price Index (CPI) rose 2.6% year over year in February, following an increase of 1.9% in January, according to a report released Tuesday by Statistics Canada.
While faster price growth was broad-based in February, the end of the goods and services tax (GST) /harmonized sales tax (HST) break partway through the month contributed notable upward pressure to prices for eligible products. Slower price growth for gasoline prices (+5.1%) moderated the all-item CPI acceleration, said the federal agency.
On a monthly basis, prices rose 1.1% in February. On a seasonally adjusted monthly basis, the the index rose 0.7%, it added.
“With the federal tax break ending on February 15, the GST and HST were reapplied to eligible products. This put upward pressure on consumer prices for those items, as taxes paid by consumers are included in the CPI,” explained Statistics Canada.
“As a result, prices for food purchased from restaurants declined at a slower pace year over year in February (-1.4%) compared with January (-5.1%). Restaurant food prices contributed the most to the acceleration in the all-items CPI in February. Similarly, on a yearly basis, alcoholic beverages purchased from stores declined 1.4% in February, following a 3.6% decline in January.”
On a year-over-year basis, gasoline prices decelerated, with a 5.1% increase in February following an 8.6% gain in January. Prices rose less month over month in February 2025 compared with February 2024, when higher global crude oil prices pushed up gasoline prices, leading to slower year-over-year price growth in February 2025, noted the federal agency.
“Month over month, prices for gasoline rose 0.6% in February. This increase was largely related to higher refining costs amid planned refinery maintenance across North America. This offset lower crude oil prices, which were largely a result of increased American supply and tariff threats, which contributed to concerns of slowing global growth.”
Tariffs affect many facets of the economy, including inflation. The imposition of tariffs by the United States and/or countermeasure tariffs by the Canadian government will have an impact on prices paid by Canadian consumers in the coming months. Read more about the potential impacts of US tariffs on the Bank of Canada’s website, said Statistics Canada.
Katherine Judge, Senior Economist at CIBC Capital Markets, said the unexpected pickup in core measures isn’t good news as this doesn’t yet reflect the impact of tariffs, which will see headline CPI exceed 3% y/y in the coming months.
Katherine Judge
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