Statistics Canada says lower pump prices and easing shelter inflation helped ease the pressure on consumers in January.
The agency said Tuesday that the annual rate of inflation ticked down to 2.3 per cent last month. Economists had expected inflation to hold steady at 2.4 per cent.
StatCan said gas prices were 16.7 per cent lower year-over-year in January, largely thanks to the end of the consumer carbon price in April.
Food prices continue to increase
That decline helped offset food inflation, which accelerated to 7.3 per cent annually in January.
StatCan said a jump of 12.3 per cent in the cost of restaurant meals year-over-year drove the increase.
That surge was mostly tied to the federal government’s “tax holiday” taking full effect a year earlier. January 2025 marked the only full month of Ottawa’s temporary tax reprieve, which removed a portion of the sales tax on dining out and a variety of goods, and annual comparisons are somewhat distorted as a result.
Prices for alcohol, children’s clothes, toys and games also jumped year-over-year due to the “tax holiday” effect.
Costs for food from the grocery store, meanwhile, rose 4.8 per cent annually in January, slowing from a 5 per cent price hike in December. StatCan said prices for fresh fruit fell 3.1 per cent in the month as stable growing seasons in producer regions eased prices for berries, oranges and melons.
Housing prices ease
Shelter inflation – long a stubborn fuel in the consumer price index – also continued its easing path to start the year.
Slower price growth in rents and mortgage interest costs meant shelter prices rose 1.7 per cent annually in January, the first time in almost five years this figure has been below 2 per cent.
StatCan’s January price report marks the Bank of Canada’s first look at inflation data since the central bank held its benchmark interest rate steady at 2.25 per cent last month.
The Bank of Canada will get another look at February inflation dynamics before its next decision on March 18.
This report by The Canadian Press was first published Feb. 17, 2026.