The Consumer Price Index (CPI) rose 1.8 per cent in December 2024 compared with a year earlier, a slight drop from November’s 1.9 per cent, Statistics Canada said. “Food purchased from restaurants and alcoholic beverages purchased from stores contributed the most to the deceleration,” the agency said. The CPI excluding food rose 2.1 per cent.
A temporary GST/HST break on items such as food, alcoholic beverages, tobacco products, and clothing took effect on Dec. 14, 2024. Statistics Canada said this drove prices down for certain goods, with food purchased from restaurants showing its first annual decline on record. Alcoholic beverages purchased from stores fell 1.3 per cent on a year-over-year basis, reversing the 1.9 per cent increase recorded in November.
On a monthly basis, the overall CPI declined 0.4 per cent, following no change in November. Seasonally adjusted, it rose 0.2 per cent. Among the largest drops were toys and games (excluding video games), down 7.2 per cent year over year, and children’s clothing, down 10.6 per cent.
Despite slower growth in shelter costs, the shelter component remained elevated, rising 4.5 per cent year over year in December. Rent prices grew 7.1 per cent, a drop from November’s 7.7 per cent, but have risen 22.1 per cent since December 2021. The mortgage interest cost index decelerated to 11.7 per cent, its smallest jump since October 2022.
Gasoline prices rose 3.5 per cent year over year, compared with a 0.5 per cent drop in November, mainly because of lower prices in December 2023 that created a base-year effect. On a monthly basis, gasoline prices fell 0.6 per cent.
Costs linked to travel also climbed, with travel services up 7.9 per cent year over year, following a 6.7 per cent decline in November. Prices for traveller accommodation jumped 13.6 per cent, largely pushed by British Columbia, which recorded a 62.0 per cent monthly hike. Statistics Canada noted the timing of a high-profile concert series.
The agency expects the GST/HST break to continue affecting prices in January 2025, when the full month will see the tax relief. It said provinces with combined sales tax systems felt the biggest effect, while provinces with separate federal and provincial sales taxes saw less impact.
Statistics Canada said inflation rates eased in the Atlantic provinces and Ontario, partly because of lower food costs at restaurants. Alberta also recorded slower rent price growth in December.
Statistics Canada will continue to monitor tax changes and their effects on consumer price inflation, the agency said.
