Canada’s inflation rate for January decreased to 2.3 percent, as reported by Statistics Canada. The drop was attributed to a decline in gasoline prices. Economists had anticipated the rate to stay steady at 2.4 percent from December. Gasoline costs fell by 16.7 percent in January compared to the same period last year, influencing the overall rate. Excluding gas prices, the inflation rate for January stood at three percent.
The Bank of Canada’s core inflation measures, which eliminate volatile factors like one-time tax adjustments and gas prices, all saw a decline in January. This brought the rates closer to the central bank’s target of two percent inflation. Douglas Porter, chief economist at Bank of Montreal, mentioned that this was positive news for the Bank of Canada, as inflation is approaching the target level more broadly. However, he cautioned that the central bank has set a high bar for reducing the key interest rate and that monetary policy cannot address supply-related shocks.
Grocery inflation in January dropped to 4.8 percent from the previous year, down from five percent in December. Lower prices for fresh fruits, particularly berries, oranges, and melons, contributed to the slower price growth. The impact of last year’s GST break, which ran from December 14, 2024, to February 15, 2025, is still affecting the inflation data.
Housing price growth has been on a downward trend since early 2024, according to Statistics Canada. In January 2026, housing price growth reached 1.7 percent, marking the first time in five years that the rate fell below two percent. Rent prices decelerated notably in Prince Edward Island and Saskatchewan. Additionally, the index tracking changes in mortgage interest payments also slowed in January.
Cell service prices experienced a slowdown in January, with a yearly increase of 4.9 percent compared to December’s 14.6 percent rate.
