Inflation ticked up 2.4 per cent last month, driven by food prices
Canada’s annual inflation rate rose to 2.4 per cent in December, driven primarily by higher prices for food at both restaurants and grocery stores.
Canada’s annual inflation rate rose to 2.4 per cent in December, driven primarily by higher prices for food at both restaurants and grocery stores.
Excluding gasoline, the Consumer Price Index (CPI) increased three per cent last month, up from a 2.6 per cent rise in November.
Statistics Canada attributed the CPI increase to the temporary Goods and Services Tax (GST)/Harmonized Sales Tax (HST) break that ended on December 14, 2024.
“This resulted in monthly declines for the exempt goods and services, which have now fallen out of the year-over-year movement, putting upward pressure on headline CPI growth,” reads the CPI report. “Moderating the acceleration in the headline CPI was a year-over-year decline in prices for gasoline in December.”
The December 2024 GST/HST exemption affected items such as restaurant food, alcoholic beverages, toys, games and hobby supplies, children’s clothing and some grocery items like potato chips and confectionery.
Increased restaurant prices were the largest factor in the CPI’s acceleration, with prices for food purchased from restaurants rising 8.5 per cent in December, compared with a 3.3 per cent increase in November.
Prices for alcoholic beverages served in licensed establishments also jumped 6.5 per cent, while store-bought alcoholic beverages were up 5.6 per cent in December.
Additionally, the cost of confectionery increased by 14.2 per cent annually in December.
“Despite being unchanged month over month, prices for food purchased from stores rose 5 per cent year over year in December,” the report said. “Coffee (+30.8 per cent) and fresh or frozen beef (+16.8 per cent) remained the largest contributors to the increase.”
Meanwhile, prices for gasoline fell 13.8 per cent annually in December, following a decline in November.
“The larger decline was due to prices falling 7.1 per cent month over month in December, following a price increase in November which coincided with various refinery and pipeline disruptions,” it said. “Crude oil prices have declined to their lowest point in over four years, amid a continued oversupply in global markets, among other factors.”
The cost of air transportation decreased annually in December, while prices for travel tours rose 3.6 per cent, due to higher prices for U.S. destinations.
On an annual basis, prices increased at a faster pace in nine provinces compared with November, with British Columbia experiencing the fastest deceleration in annual price growth.