Cape Breton Island 
Canada’s Consumer Price Index (CPI) increased by 3.4% year-over-year, a slight rise from November’s 3.1%, according to Statistics Canada. Inflation remained at 3.1% in October.
Gasoline prices were a major contributor to the overall CPI acceleration, which comes ahead of the overnight rate change announcement by The Bank of Canada next week.
Here are the highlights of the December inflation report by Statistics Canada:
- Gasoline Prices: Despite a monthly decline for the fourth straight month, gasoline prices rose 1.4% year-over-year in December, reversing a 7.7% drop in November. This change is attributed to a base-year effect, as December 2022 saw a more significant monthly price fall.
- Excluding Gasoline: When gasoline is excluded, the year-over-year CPI increase slowed from 3.6% in November to 3.5% in December.
- Airfares and Rent: Significant price rises were noted in airfares and rent. Air transportation costs surged 31.1% month-over-month due to high holiday travel demand, while rent prices climbed 7.7% year-over-year, influenced by higher interest rates. Per the National Rent Report by Rentals.ca, the asking rents increased by 9%.
- Food and Vehicles: Store-bought food prices maintained a steady year-over-year increase of 4.7%. Passenger vehicle prices also rose, with a 2.3% year-over-year increase in December, driven by new model releases.
- Regional Variations: In December, nine provinces saw faster price growth compared to November. Fuel oil prices, vital for heating in Atlantic Canada, a common heating source, declined less steeply (-13.0%) than in November (-23.6%).
Annual Overview
Last year, the Consumer Price Index rose by 3.9% annually, a significant drop from the 40-year high of 6.8% in 2022 but still the highest since 1991, excluding 2022. Excluding energy, the CPI increased by 4.5%.
Price growth slowed in six of eight major components, most notably transportation, due to lower gasoline prices. Growth in goods prices eased to 3.2%, led by a slowdown in non-durable and durable goods, benefiting from improved supply chains. Service prices increased by 4.6%, with a slight deceleration observed. Statistics Canada says year-over-year CPI growth fluctuated between 3% and 4% in the latter half of 2023.
