Rising grocery costs remained a key pressure point for Canadians in January, even as overall inflation edged lower.
Statistics Canada said the Consumer Price Index rose 2.3% year over year, down from 2.4% in December.
Economists had expected inflation to hold steady. The overall slowdown was largely driven by lower gasoline prices and easing shelter costs.
In British Columbia, however, inflation increased from 1.7% to 2.0% – the only province to see a growth in the price index.
The agency said that was due to the base-year effect "as prices for hotels declined on a monthly basis in January 2025 following an increase in December 2024 coinciding with a series of high-profile concerts in Vancouver."
Nationally, food purchased from stores rose 4.8% annually in January, only slightly slower than December’s 5.0% pace. While fresh fruit prices fell 3.1% due to stable harvests in producer regions, grocery inflation remains well above the headline rate, keeping food costs elevated for households.
At the same time, restaurant prices surged 12.3% year over year, largely reflecting base-year distortions tied to last year’s temporary GST/HST break. Other previously tax-exempt goods also saw strong increases, including alcoholic beverages, toys and children’s clothing.
Overall, Statistics Canada put annual food inflation in January at 7.3%.
Gasoline prices fell 16.7% year over year, the largest contributor to the overall slowdown in inflation.
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Excluding gasoline, the CPI rose 3.0%. Excluding food and energy, inflation came in at 2.4%.
Shelter inflation continued to ease, rising 1.7% annually, the first time in nearly five years that growth has fallen below two per cent. Rent and mortgage interest costs both showed slower increases.
The CPI was unchanged month over month in January and rose 0.1% on a seasonally adjusted basis.
The report gives the Bank of Canada its first look at inflation since it held its benchmark interest rate at 2.25%. The central bank will see February data before its next decision on March 18.
