Inflation edges up to 2.4 per cent in December as earlier tax break skews comparison

Canada’s inflation rate rose slightly at the end of last year, with consumer prices increasing at an annual pace of 2.4 per cent in December, according to new data from Statistics Canada. That marked an uptick from 2.2 per cent in November.

The national statistics agency said the increase was partly driven by comparison effects linked to a temporary federal tax holiday that had been in place a year earlier. Prices that were held down during that period have since returned to more typical levels, pushing the year-over-year inflation figure higher.

Economists often point to these base-year effects as a reason monthly inflation data can fluctuate even when broader price pressures remain relatively stable. Core measures of inflation, which strip out volatile items, continue to be closely watched by the Bank of Canada as it assesses interest rate decisions.

The latest figures suggest inflation remains within the central bank’s target range, though cost pressures for essentials such as housing and food continue to be a concern for households across the country, including in British Columbia and Alberta, where affordability remains a key public issue.