Canadian prices, as measured by the Consumer Price Index (CPI), rose 2.4 per cent on a year-over-year basis in December, following the 2.2 per cent increase in November. On a seasonally adjusted monthly basis, the CPI was up 0.3 per cent in December, equivalent to a 3.7 per cent increase on an annualized basis. The CPI ex-gasoline increased by 3.0 per cent in December, up by 0.4 points from the previous month. Additionally, food prices increased by 6.2 per cent year-over-year, driven by base-year effects from last year’s tax break on restaurant food and continued acceleration in grocery prices. In BC, consumer prices rose 1.7 per cent year-over-year in December, down 0.5 points from November’s increase. The Bank of Canada's preferred measures of median and trimmed inflation, which strip out volatile components, fell to 2.5 and 2.7 per cent year-over-year, respectively. 
 
Much of the upward pressure in December’s CPI print was a base-year effect from last year’s GST/HST holiday on several aggregates, counteracted by larger declines in gasoline prices. Nonetheless, 3-month annualized core inflation cooled to about 1.65 per cent, its lowest level since Spring of 2024, and falling below the midpoint of the Bank of Canada’s threshold. Looking ahead, we expect a rate-hold from the Bank next week as they further evaluate Canada’s economic growth in the final quarter relative to their most recent projections.

Copyright British Columbia Real Estate Association. Reprinted with permission.