Annual inflation cools to 1.8% in February, StatCan says

Statistics Canada says the annual rate of inflation dipped below two per cent in February as the end of last year’s federal “tax holiday” helped to take some steam out of the yearly price comparisons.

The agency says inflation last month came in at 1.8 per cent year-over-year, half a percentage point lower than January’s figures.

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The main factor driving the headline number lower was the end of last year’s tax holiday, which saw the federal sales tax taken off a variety of household staples for a two-month period ending mid-February 2025.

Lower prices from the tax break were only in effect for half of February last year compared with all of January, making the annual inflation calculations somewhat better last month.

The end of the tax holiday helped cool inflation at restaurants as well as on some groceries, but StatCan also noted “broad-based” declines on items like beef bought from the store.

StatCan says gas prices, meanwhile, were starting to creep higher at the end of February in the lead up to the war in the Middle East, which many economists expect will push inflation higher in the months to come.

This report by The Canadian Press was first published March 16, 2026.