Canada’s inflation rate cooled slightly to 1.8 per cent in December, according to Statistics Canada.
It comes as a temporary tax break on certain goods was introduced in the middle of the month.
Food purchased from restaurants and alcohol bought from stores contributed most to the slowdown in the Consumer Price Index.
Restaurant food prices were down 1.6 per cent on a year-over-year basis — the index’s fist annual decline — combined with its largest monthly decline at 4.5 per cent.
Prices for alcoholic beverages purchased from stores declined 1.3 per cent year over year, compared with a 1.9 per cent increase in November.
On a monthly basis, prices fell 4.1 per cent, almost three times higher than what had previously been the largest monthly decline recorded in December 2005.
Food and alcoholic beverages are among the major components impacted by the two-month tax break, which runs until mid-February.
Other items also saw decreases. Prices for toys, games (excluding video games) and hobby supplies decreased 7.2 per cent, while the children’s clothing index fell 10.6 per cent.
Meanwhile, shelter prices increased at a slightly slower pace in December but still remain elevated. There were up 4.5 per cent year over year compared to 4.6 per cent in November.
Rent prices decelerated on a year-over-year basis in December to 7.1 per cent, but have increased by more than 22 per cent over the past three years.
Year over year, prices for gasoline rose 3.5 per cent in December compared with a 0.5 per cent decline in November. StatCan said the increase was mainly due to a base-year effect as prices declined 4.4 per cent month over month in December 2023.
From a provincial standpoint, prices decelerated on a year-over-year basis in Atlantic Canada, Ontario and Alberta.
