Inflation Surges to 2.6% in February as Tax Break Expires: What It Means for You

In February, Canada experienced a sharp rise in inflation, accelerating to 2.6% from 1.9% in January, as the federal government’s temporary tax break ended mid-month, according to Statistics Canada. This increase overshot the 2.2% economists anticipated. The consumer price index, which factors in sales taxes, showed that inflation would have reached 3% without the tax holiday for half the month. Restaurant food prices fell 1.4% year-over-year during the holiday, but resumed contributing to inflation as taxes returned. Additionally, Canadian travel costs spiked by 18.8% due to high demand during President’s Day weekend. All provinces saw rising prices, particularly Ontario and New Brunswick. Notably, February’s inflation data does not yet account for the tariffs that began in March.