Canada's CPI Slows as Expected in February Thanks to End of Tax Breaks

08:55 AM EDT, 03/16/2026 (MT Newswires) -- The Canadian consumer price index rose 1.8% on a year-over-year basis in February, following a 2.3% year-over-year increase in January, said the country's statistical agency on Monday.

February's 1.8% year over year CPI was a tad lower than the 1.9% year-over-year consensus forecast provided by Scotiabank.

The slowdown in the all-items CPI on a year-over-year basis reflects the monthly increase in prices was largely driven by a monthly increase in prices in February 2025, when the GST/HST break ended partway through the month, and as a result, consumers paid more for affected products, noted Statistics Canada.

This month-over-month increase fell out of the 12-month price movement in February 2026, resulting in a decelerating base-year effect on headline inflation, said StatsCan. The most notable index impacted by the base-year effect in February 2026 was food purchased from restaurants, in addition to smaller impacts from alcoholic beverages and toys, it added.

On a year-over-year basis, there was downward pressure in February from a range of indexes, including gasoline (-14.2%), natural gas (-17.1%), homeowners' replacement cost (-2.1%), other owned accommodation expenses (-2.6%) and travel tours (-3.1%).

Excluding the effect of indirect taxes, the CPI rose 1.9% year over year in February, decelerating each month since December 2025 (+2.5%), stated the Ottawa-based agency.

The CPI was up 0.5% month over month non-seasonally adjusted (NSA) in February 2026. On a seasonally adjusted (SA) monthly basis, the CPI increased 0.1%.

Scotiabank's consensus NSA monthly CPI was 0.7%.

The monthly and quarterly CPI reports, reported by StatsCan, measure the index level of prices paid by consumers for a basket of goods and services such as food, energy, vehicle, medical care, apparel, and housing. The core measure, which excludes food and energy due to their volatility, is closely watched by markets and the Bank of Canada as a sign of underlying inflation pressures.

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