Toronto 
Canada’s annual inflation rate eased to 2.3% in March, down from 2.6% in February, according to the latest Consumer Price Index (CPI) data released Tuesday.
The deceleration was mainly due to declining prices for travel services and gasoline.
Gasoline prices decreased by 1.6% in March, following a 5.1% increase in February. The decline reflects lower crude oil prices amid concerns over global demand, economic uncertainty, and a planned production increase by OPEC and its partners.
Statistics Canada says travel tour prices dropped 4.7% year over year after a sharp rise in February. On a monthly basis, travel costs fell by 8.0%, reversing gains linked to the U.S. President’s Day holiday. Airfare also declined, with prices falling 12.0% annually, partly due to reduced Canadian travel to the United States and a smaller monthly increase compared to the same period last year.
Cellular service costs also continued to decline, dropping 8.8% annually, the result of widespread promotional pricing and a sharp 6.8% monthly decrease.
Offsetting some of the broader price relief was the end of the temporary Goods and Services Tax (GST)/Harmonized Sales Tax (HST) break, which concluded on February 15. March marked the first full month of reintroduced taxes, contributing to price increases in affected categories.
Food purchased from restaurants rose 3.2% in March, reversing a 1.4% drop the month before and exerting upward pressure on overall prices.
On a monthly basis, the CPI increased by 0.3%, though seasonally adjusted data showed no change.
Inflation slowed in most provinces. Eight provinces experienced slower price growth, including Ontario, Manitoba, and British Columbia. Nova Scotia was the only province where inflation rose, increasing from 2.1% to 2.3%, driven by higher shelter costs. Newfoundland and Labrador recorded the lowest rate at 1.1%. Manitoba saw the highest, though it dropped from 3.5% to 3.0%.
The measures of core inflation, CPI-trim and CPI-median, which the Bank of Canada uses as one of the factors to determine the interest rate, hovers around 2.8% and 2.9%, respectively.
CPI-trim and CPI-median are core inflation measures that exclude extreme price changes. CPI-trim removes the outer 40%, while CPI-median focuses on the median price change.
The next scheduled date for announcing the bank rate is Wednesday, April 16, 2025.
