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Canada's Inflation Hits 2.4% as Tax Holiday Ends

1/21/2026

41 6 Full Breakdown

Summary

Story summary

Canada’s inflation rose to 2.4% in December 2025, up from 2.2% in November, as the federal tax holiday expired.
Core inflation measures excluding food and energy cooled, indicating easing underlying price pressures.
Bank of Canada (BoC) is expected to keep policy rate at 2.25% through 2026.
Gasoline prices fell 13.8% year-over-year, partly offsetting the inflation rise.
The next Bank of Canada decision is scheduled for January 28, 2026.

History

Historical Context

The Inflation Control Act of 1978 emerged from Canada's struggle with soaring inflation, which peaked at 13.5% that year. Following earlier measures like the Anti-Inflation Act of 1975, the 1978 Act imposed wage and price controls to stabilize the economy. Today, Canada faces a 2.4% inflation rate, highlighting ongoing challenges in balancing economic growth and inflation management.

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Story summary

Canada’s inflation rose to 2.4% in December 2025, up from 2.2% in November, as the federal tax holiday expired.
Core inflation measures excluding food and energy cooled, indicating easing underlying price pressures.
Bank of Canada (BoC) is expected to keep policy rate at 2.25% through 2026.
Gasoline prices fell 13.8% year-over-year, partly offsetting the inflation rise.
The next Bank of Canada decision is scheduled for January 28, 2026.

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