Investing.com -- Tuesday’s report from Statistics Canada revealed that the Consumer Price Index (CPI) rose by 2.6% in February 2025, marking a significant increase from the 1.9% rise in January. This acceleration exceeded the consensus estimates of 2.1%, as broad-based price growth was observed across various sectors.
The termination of the goods and services tax (GST)/harmonized sales tax (HST) holiday midway through February exerted considerable upward pressure on the prices of eligible products. Despite this, the overall acceleration of the CPI was tempered by a slower increase in gasoline prices, which saw a 5.1% rise compared to the previous month.
On a month-to-month basis, the CPI experienced a 1.1% increase in February, while a seasonally adjusted monthly rise of 0.7% was noted. The ending of the federal tax break on February 15 led to the reapplication of GST and HST on eligible products, which in turn influenced consumer prices as these taxes are reflected in the CPI.
The food sector, especially prices for food purchased from restaurants, displayed a slower year-over-year decline in February of -1.4%, in contrast to the -5.1% decrease observed in January. Restaurant food prices were the most significant contributor to February’s CPI acceleration. Additionally, the price decline of alcoholic beverages purchased from stores slowed to 1.4% in February from a 3.6% decline in January.
Travel tour prices in Canada saw a substantial year-over-year increase of 18.8% in February, which was attributed to heightened demand during the United States’ President’s Day weekend. This marked a significant jump from the 8.3% increase registered in January. In the same month, travel tour prices surged by 23.2% on a monthly basis.
The gasoline sector experienced a slower year-over-year price increase in February, with a 5.1% rise following an 8.6% gain in January. The reduced month-over-month price increase in February 2025, compared to the same month in the previous year, was attributed to higher global crude oil prices at that time, which resulted in a more moderate year-over-year price growth in February 2025. Gasoline prices in February were influenced by higher refining costs due to planned refinery maintenance across North America, which counterbalanced the effects of lower crude oil prices.
Statistics Canada will continue to closely monitor the impact of tariffs and other economic developments on consumer price inflation. The CPI includes all taxes paid by consumers, meaning no special adjustments are needed to account for tariffs, as their effects are already integrated into the final prices collected.