The country’s consumer price index rose 1.8% year over year in December, down from the 1.9% increase in November, largely due to the temporary tax relief provided by the federal government.
Statistics Canada’s inflation report released Tuesday said prices for food purchased at restaurants and alcoholic beverages purchased in stores contributed the most to slowing growth.
The federal government implemented a temporary tax holiday on these items in mid-December. The measure also affected clothing and certain toys, among others.
Without the GST holiday, Statistics Canada estimates that inflation would have been 2.3%.
Grocery price growth also slowed in December from the previous month, falling to 1.9% year over year, compared to 2.6% in November.
-Year over year, gasoline prices increased 3.5% in December after falling 0.5% in November. The increase is mainly attributable to a year-on-year effect.
House prices showed a slight slowdown in growth in December, but remained high. They increased by 4.5%. Rental price growth also slowed year-over-year in December, to 7.1%.
Attention now turns to the Bank of Canada, which is expected to unveil its latest interest rate decision next week.
In Quebec, inflation stood at 1.6% in December, after being 1.5% in November.
