Affected by base effects, Canada's inflation rate has slowed to 1.8%

MaticHoleFiller · 2026-03-17T03:09:28+00:00

Canada's overall inflation rate declined to 1.8% in February, below the 1.9% expected by economists. The slowdown in inflation came after the sales tax exemption policy expired, with weaker food price increases and a slowdown in frozen or fresh beef price increases also contributing factors.

MaticHoleFiller

2026-03-17 03:09:28

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After excluding the sales tax relief measures from the annual comparison base, Canada’s inflation rate slowdown last month exceeded expectations.

Data released by Statistics Canada on Monday showed that the overall inflation rate in February dropped from 2.3% in January to 1.8%. This figure was below the 1.9% forecasted by economists surveyed by Bloomberg.

Former Prime Minister Justin Trudeau implemented temporary sales tax relief policies on a range of goods, including restaurant meals and children’s toys, which expired in mid-February last year.

Although the relief initially boosted year-over-year overall inflation due to base effects, its impact is now reversing, leading to a slowdown in inflation, which may also influence March’s inflation data.

In February, the year-over-year increase in food prices purchased in stores slowed to 4.1% from 4.8% the previous month. This slowdown was mainly due to a weakening in the price increases of frozen or fresh beef.

Grocery prices have been a major pain point for Canadian consumers, rising a total of 30.1% over the past five years.

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