Canadian consumer prices rise mildly in December, sales tax break aids

Published 01/21/2025, 08:42 AM

Investing.com -- In December, Canadian consumer prices continued their gentle upward trend, according to recently released data.

This was largely due to a sales tax break that began in the middle of the month, which resulted in reduced prices for items such as alcohol, restaurant foods and children's clothing.

Statistics Canada said that the annual inflation rate fell to 1.8%, slightly lower than anticipated and a slight decrease from November's 1.9%. On a monthly basis, the consumer price index saw a contraction of 0.4%.

On an annual basis, prices for alcoholic beverages bought from stores saw a decrease of 1.3% in December, a significant change from the 1.9% increase observed in November.

Food purchased at restaurants also saw a decrease, with prices falling by 1.6% in December, compared to a 3.4% rise the previous month.

The Consumer Price Index includes all excise and other taxes paid by consumers. Therefore, any tax break directly reduces the prices recorded by the statistical agency.

The sales tax break, which affected a tenth of the components of the CPI basket, is set to continue until mid-February. Statistics Canada noted that January will see a full month of exemption, as opposed to the 18 days of exemption in December.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.