The annual inflation rate rose to 2.6% in February, driven largely by the reinstatement of GST and HST on eligible goods and services, Statistics Canada said Tuesday.
The Consumer Price Index (CPI) increased from 1.9% in January, with the end of the federal GST/HST exemption on February 15 significantly contributing to higher prices.
Prices for restaurant food, which had fallen 5.1% year-over-year in January, saw a more modest decline of 1.4% in February due to the reinstatement of these taxes, the agency said.
Monthly CPI rose 1.1% in February, while seasonally adjusted figures indicated a 0.7% monthly increase.
Gasoline prices continued to rise year over year but at a slower pace, increasing 5.1% compared to January’s 8.6% gain. On a monthly basis, gasoline prices rose slightly by 0.6%, primarily due to higher refining costs linked to scheduled maintenance across North America.
Travel tours also saw significant price increases, jumping 18.8% year over year, attributed largely to increased demand from Canadian travelers heading to the U.S. during the President’s Day weekend.
Alcoholic beverages bought in stores declined 1.4% in price compared to a 3.6% drop in January, again reflecting the removal of the tax break.
Statistics Canada noted about 10% of the products in the CPI basket were directly affected by the tax exemption which began in December and ended mid-February. Provinces with combined GST/HST experienced a more pronounced impact.
Looking ahead, Statistics Canada said ongoing tariffs between Canada and the United States could further influence consumer prices, although no immediate changes to the CPI methodology are planned since tariffs are already factored into final prices.
