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Inflation ticks lower to 1.8% in December, thanks in part to GST tax break
Posted Jan 21, 2025 04:00:02 AM.
Last Updated Jan 21, 2025 08:49:31 AM.
Canada’s annual inflation rate fell to 1.8 per cent in December, thanks in large part to the federal government’s temporary tax break.
Statistics Canada’s consumer price index report on Tuesday said food purchased from restaurants and alcohol purchases from stores contributed the most to the deceleration.
The federal government introduced a temporary pause on taxes to such items in mid-December, along with tobacco and cannabis products, clothing, and some toys, among others.
Without the tax break, Statistics Canada said the annual inflation rate would have risen to 2.3 per cent.
Grocery prices also decelerated from a month ago, falling to 1.9 per cent.
Attention now turns to the Bank of Canada, which is set to make an interest rate decision next week.
