Canadian Consumer Price Index Increases 1.8% Year-Over-Year in December

On Tuesday, Statistics Canada (StatCan) reported that the Consumer Price Index (CPI) rose 1.8% year-over-year basis in December, down from a 1.9% increase in November. Food purchased from restaurants and alcoholic beverages purchased from stores contributed the most to the deceleration. Excluding food, the CPI rose 2.1%.

On a monthly basis, the CPI declined 0.4% in December, following a flat month in November. On a seasonally adjusted monthly basis, the CPI rose 0.2%.

A temporary GST/HST break on certain goods was introduced on December 14. The major components impacted by the tax break were food; alcoholic beverages, tobacco products, and recreational cannabis; recreation, education, and reading; and clothing and footwear.

Highlights of the December CPI report include the following:

• The shelter component grew at a slightly slower pace, rising 4.5% year-over-year, following a 4.6% increase in November.
• Rent prices decelerated on a year-over-year basis, increasing only 7.1% compared with November’s increase of 7.7%. However, since December 2021, rent prices have increased 22.1%.
• The mortgage interest cost index decelerated for the 16th consecutive month, reaching 11.7% year-over-year—the smallest increase since October 2022.
• Prices for gasoline rose 3.5% year-over-year, up from a 0.5% decline in November. The increase was mainly the result of a base-year effect as prices declined 4.4% month-over-month in December 2023, when there was uncertainty regarding oil demand coupled with high levels of supply, which put downward pressure on prices.
• On a monthly basis, gasoline prices fell 0.6%.
• Prices for travel services rose 7.9% year-over-year, following a 6.7% decline in November.