If you feel like things have been getting more and more expensive lately, you're not imagining things — inflation in Canada is continuing to creeping up, and Canadians' wallets are feeling the squeeze.
According to the latest numbers Statistics Canada released on Tuesday, the Consumer Price Index (CPI) in Canada rose 2.6% year over year in February 2025, up from 1.9% in January. That means the cost of living in Canada is on the rise — but not all products' prices are inflating at the same rate.
The CPI is one of the ways Canada measures inflation — it tracks how much prices are going up (or down) for the stuff we all spend money on, like groceries, gas, rent and more. It's one of the main tools used to figure out how the Canada inflation rate is changing and how much more (or less) average Canadians are paying for everyday life.
But here's where things get interesting...
Not everything is inflating equally
While inflation is rising overall, some things are inflating at warp speed — while other prices are actually going down.
Take mortgage interest costs, for example — they're up a whopping 9.0% over the past year. If you're a homeowner with a variable mortgage, chances are you've noticed those payments climbing. And if you're renting instead, that's not exactly a break either — average rent prices rose 5.8% year over year, well over the average inflation rate of 2.6%.
Other items blowing up in price over the last 12 months include:
- Pasta mixes: up 35.5%
- Travel tours: up 18.8%
- Clothing accessories: up 14.5%
- Beef: up 12.2%
- Sporting and exercise equipment: up 11.4%
- Oranges: up 10.7%
- Coffee: up 9.5%
- Fruit juices: up 9.4%
- Internet access services: up 8.6%
So what's driving inflation right now?
According to Statistics Canada, one big factor driving the month-over-month changes was the end of the GST/HST tax break, which ended mid-February. When that break expired, taxes were reapplied to about 10% of the items in the CPI basket, pushing up prices for a bunch of stuff.
Because of this, restaurant food prices, which had been falling, didn't drop as much. They went down only 1.4% in February, compared to a 5.1% drop in January — making this one of the key drivers behind the overall inflation bump.
Alcohol prices also didn't drop as much, with a 1.4% decline in February after a 3.6% drop in January.
Gas prices slowed things down a bit
Ironically, not all increases added to the inflation jump. Statistics Canada says that slower price growth for gasoline prices actually helped keep CPI from rising even more.
They only went up 5.1% over the past year, compared to 8.6% in January. Why? Last year, gas prices spiked because of high crude oil costs.
This February, on the other hand, crude oil was cheaper, thanks to more U.S. supply and some tariff drama that made people worry about a global slowdown. But higher refining costs still pushed gas prices up 5.1% compared to last year, according to Statistics Canada.
Meanwhile, some prices are actually dropping
Yes, some things are cheaper now than they were a year ago — and not just by a little. Here are some standout price drops:
- Digital devices: down 9.9%
- Canned infant/junior foods: down 9.2%
- Books and reading materials: down 8.8%
- Tomatoes: down 8.2%
- Grapes: down 7.1%
- Chips and other snack foods: down 7.1%
- Upholstered furniture: down 6.7%
- Ice cream: down 6.0%
So, if you're into tech deals and tomatoes, you might be feeling a bit of relief.
Inflation hits different across Canada
Where you live also matters. According to the federal statistics agency, all provinces saw prices rising faster in February than in January, but the biggest jumps were in Ontario, New Brunswick, P.E.I. and Nova Scotia.
That's partly because the GST/HST tax break had more of an impact in provinces with the harmonized sales tax (HST) — when the break ended, prices there rose by 13% to 15%, in contrast to the 5% hike seen in provinces that use GST instead.
What's next?
As always, external stuff like tariffs from the U.S. could mess with prices even more. Statistics Canada notes that tariffs and Canada's retaliatory measures "will have an impact on prices paid by Canadian consumers in the coming months" — so, yep, it's a good idea to keep an eye on that.
Plus, Prime Minister Mark Carney's recent move to scrap the consumer carbon tax should have rippling effects across the Canadian economy as well once that change goes into effect on April 1.
Bottom line: Inflation in Canada continues to climb, but Canada's CPI data shows it's not affecting every purchase equally. Depending on what you're buying — and where you live — the cost of living might be rising faster (or slower) than it seems. And as the economy keeps shifting, we'll be watching to see what prices take off next.
Love this? Check out our Narcity noticeboard for details on jobs, benefits, travel info and more!
AI tools may have been used to support the creation or distribution of this content; however, it has been carefully edited and fact-checked by a member of Narcity's Editorial team. For more information on our use of AI, please visit our Editorial Standards page.
