Canada’s inflation rate rose an annualized 2.4% in December, more than economists had expected.
Statistics Canada said that the Consumer Price Index (CPI) increased 2.4% on a year-over-year basis in December, up from a 2.2% gain in November 2025.
Economists polled by Reuters (TRI) had forecast that Canada’s inflation rate would hold steady at 2.2% in December from a year earlier.
However, the latest increase was largely due to a year-over-year comparison from December 2024 when Canada’s federal government temporarily suspended the Goods and Services Tax (GST), resulting in a sharp decrease in consumer prices.
In December 2025, inflation in Canada benefited from a decline in prices for gasoline. Excluding gasoline, Canada’s inflation rate rose 3% year-over-year, following 2.6% growth in November.
On a seasonally adjusted monthly basis, Canada’s December inflation rate increased 0.3%.
Higher restaurant prices were the largest contributor to December’s inflation rise. Prices for food purchased from restaurants grew 8.5% in December compared with a 3.3% gain in November.
Prices for food purchased from stores rose 5% year-over-year in December, with coffee prices increasing 30% due to tariff impacts.
Offsetting gains were prices for gasoline, which fell 13.8% in December, and prices for travel tours, which fell 3.2% on a year-over-year basis in December after an 8.2% drop in November.
Inflation rose at a faster pace in nine Canadian provinces in December compared with November. Only British Columbia saw a decline in inflation at the end of 2025.
