The Consumer Price Index (CPI) rose 1.8% year-over-year in December 2024, slightly down from November’s 1.9%, according to Statistics Canada. The decline was largely influenced by reduced prices for food purchased from restaurants and alcoholic beverages from stores. Excluding food, the CPI rose 2.1%.
The monthly CPI declined by 0.4% in December, following no change in November.
Statistics Canada says the reduction was partly due to the introduction of a temporary GST/HST break on certain goods which started on December 14. The tax exemption affected approximately 10% of the CPI basket, including food, clothing, alcoholic beverages, tobacco products, and recreational cannabis.
Atlantic provinces and Ontario experienced slower price growth, influenced by lower food costs. Alberta saw reduced rent price growth, which moderated overall price increases in the province.
CPI in Key Categories
- Food and Beverages: Restaurant food prices fell 1.6% year-over-year, marking the index’s first annual decline. Monthly prices dropped 4.5%. Alcoholic beverages from stores saw a 1.3% year-over-year price decrease, with a record monthly drop of 4.1%.
- Consumer Goods:: Toys, games (excluding video games), and hobby supplies experienced a 7.2% annual price decline, while children’s clothing fell by 10.6%.
- Shelter: Shelter costs grew at a slower pace, rising 4.5% annually in December compared to 4.6% in November. Rent prices increased by 7.1% year-over-year, while mortgage interest costs grew 11.7%, the smallest rise since October 2022.
- Gasoline: Gasoline prices rose 3.5% annually due to a base-year effect. However, they dropped 0.6% on a monthly basis.
- Travel Services: Prices for travel services increased 7.9% year-over-year in December, driven by a 13.6% rise in traveler accommodation costs. British Columbia saw a notable 62% monthly spike due to a prominent concert series.
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, are nudged lower and hover around 2.5% and 2.4%, 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, January 29, 2025.