Canada’s annual inflation rate edged up to 1.9% in January 2025, a slight increase from the 1.8% recorded in December 2024.
The uptick was mainly driven by rising energy prices, with gasoline costs surging 8.6% year-over-year and natural gas prices climbing 4.8%.
The latest inflation data, released on Tuesday, revealed that energy prices overall increased 5.3% compared to the same period last year, marking a key contributor to the inflationary pressure.
On the other hand, food prices showed a decline, falling 0.6% year-over-year—the first decrease since May 2017. Additionally, food prices at restaurants dropped significantly, with a 5.1% decrease, marking the largest drop on record.
The overall inflation figures were influenced by the federal government’s temporary GST/HST relief, which expired last week.
Economists estimate that without this tax break, inflation would have likely surged to 2.7% in January.