Inflation jumps to 2.6%, as GST/HST break ends

Canada’s annual inflation rate surged to 2.6% in February, up from 1.9% in January, according to Statistics Canada data released on Wednesday. 

The end of the federal GST/HST break in mid-February partially contributed to the rise, pushing up prices on eligible goods and services.

Restaurant food prices, for instance, declined at a slower pace in February compared with January. 

That smaller drop was enough to significantly influence the CPI’s upward movement, as taxes on meals away from home returned. 

Similarly, alcoholic beverages purchased from stores saw a decline from the previous month.

Meanwhile, gasoline prices cooled off year over year. They rose 5.1% in February, compared with an 8.6% increase in January. 

This moderation stemmed from lower month-over-month gains in February 2025 relative to February 2024, when high global crude oil prices pushed gas costs higher. 

Although the year-over-year advance slowed, gas prices still edged up 0.6% in February due to planned refinery maintenance across North America, which boosted refining costs.

On a monthly basis, the CPI climbed 1.1% in February, with seasonal adjustments showing a 0.7% increase. 

While the inflation rate remains below historical spikes, the jump from 1.9% to 2.6% underscores the significant impact of ending the GST/HST break. 

Additional factors, such as global oil pricing and tariff concerns, may influence inflation in the months ahead.