Inflation hits 2.4% in December as last year’s GST break impacts data

Canada’s annual inflation rate rose to 2.4 per cent in December compared with the same period last year, Statistics Canada said Monday, after the federal government implemented a GST break that helped push prices down some.

The temporary tax cut, which began on December 14, 2024, is expected to last for two months. But according to the data agency, it continued to echo through monthly inflation data until last month, when it fell out of year-on-year movement and price rises accelerated.

December’s rate was slightly higher than the 2.2 percent rate seen in November. This was partially offset by the year-on-year decline in gas prices. Excluding energy, inflation rose to three percent in December (following a 2.6 percent rise in November).

The increase in grocery prices remained unchanged between November and December, but increased to five percent compared to the same period last year, with coffee and fresh or frozen beef still driving the increase.

Travel tourism prices fell 3.2 percent in December compared with the same period last year, while air transportation prices fell 0.8 percent.

While StatsCan says transportation prices typically rise during the holidays, the rate increased 34.5 percent in December compared to November – higher than the previous increase during the final month of the year.

The Bank of Canada tracks core inflation measures, which removes volatile elements such as gas prices or tax-related changes from the data. Two of those measures fell in December.

Inflation increased by 2.1% on annual average basis

Along with the December inflation report, Statistics Canada also released its annual review of consumer prices for 2025. Inflation rose 2.1 percent on an annual average basis last year, after rising by 2.4 percent in 2024.

Excluding energy, prices are expected to rise 2.6 percent in 2025, the same as a year earlier.

Grocery prices rose at a faster pace, while the rate of growth of shelter prices slowed.