Lower gas prices were the key driver of lower inflation, with prices down 16.7% year-over-year.
Statistics Canada has released the latest inflation data, showing Canada’s inflation rate eased to 2.3% year-over-year in January, a slight drop from 2.4 in December of last year. Lower gasoline prices were a key factor, with prices down 16.7% year-over-year.
Grocery prices are up 4.8% year-over-year, down from 5.0%. Fresh fruit prices declined by 3.1%. The price of food purchased from restaurants rose 12.3%, largely due to a base-year effect as a GST/HST tax break expired.
Shelter costs rose 1.7%. As noted by Statistics Canada, “This is the first time in nearly five years that year-over-year shelter price growth has fallen below 2.0%. Slower price growth for rent and mortgage interest cost drove the deceleration.”
As you can see in the chart below, there has been a steady decrease in the rate of shelter cost increases since 2024:
While the cost of living remains a significant concern, lower inflation, combined with a shift towards modest per capita GDP growth, could start to ease the pressure for some Canadians. We also continue to see that Canada’s economy is showing resilience even in the face of the Trump Administration’s deliberate push to weaken our country.
Spencer Fernando
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