Canada’s inflation rate slowed to 2.3% in March, down from 2.6% in February, as lower prices for gasoline and travel tours helped slow rising costs, Statistics Canada reported on Tuesday.
StatsCan said the drop in the Consumer Price Index (CPI) was mainly due to falling prices in two key categories, gasoline and vacation travel.
Gas prices were lower than in March 2024, while travel tour costs dropped following the winter travel season.
The end of the temporary Goods and Services Tax (GST) and Harmonized Sales Tax (HST) break on February 15 partially offset the overall decrease, as eligible products faced the tax for all of March.
While the all-items CPI climbed 0.3% on a monthly basis, the seasonally adjusted figures showed no change.
Travel-related costs saw the sharpest drop.
The price of travel tours fell 4.7% year over year, following a jump in February.
Month over month, tour prices plunged eight percent in March, partly due to weaker demand after President’s Day weekend in the US.
Airfare also fell 12% year over year, continuing its decline from February.
Gasoline prices dropped 1.6% compared with last March, reversing the five percent jump seen in February.
Analysts attribute this drop to concerns over slowing global oil demand and signs of weaker economic growth, combined with the Organization of the Petroleum Exporting Countries and its partners sticking to their planned production boost.
