• Prior was +0.5%
• CPI m/m +0.9% vs +1.1% expected
• Prior CPI m/m +0.5%

Core measures:

• BOC core 2.5% vs 2.3% prior
• BOC core m/m +0.2% vs +0.4% prior
• Core CPI 0.0% m/m +0.2% vs prior
• CPI median +2.3% vs +2.3% expected (prior was 2.3%)
• CPI trim +2.2% vs 2.3% expected (prior was 2.3%)
• CPI common 2.6% vs 2.4% prior
• Gasoline prices ___% vs -14.2% y/y prior
• Gasoline prices ___% m/m vs +3.6% m/m prior
• Shelter ___% vs +1.5% y/y prior

Canadian headline CPI inflation has been distorted for much of the past year by the federal government’s temporary GST/HST tax holiday, which ran from December 14, 2024 to February 15, 2025 and covered roughly 10% of the CPI basket. The tax break pulled prices lower on categories like restaurant meals, alcohol, children’s clothing, and toys during the holiday window, then pushed them back up when it ended in mid-February 2025. Those base-year effects have been working their way through year-over-year comparisons ever since, inflating readings in January 2026 before unwinding sharply in February, when headline inflation fell to 1.8% from 2.3% the prior month. March marks the final month affected by these distortions, after which clean year-over-year comparisons will return and give the Bank of Canada a much clearer read on underlying price pressures.

Beneath the tax noise, the broader disinflation trend has remained intact. Shelter inflation slipped to 1.5% in February, with rent growth and mortgage interest costs continuing to ease as prior Bank of Canada rate cuts filter through. All three core measures — trim, median, and common — fell to 2.3–2.4% in February, their lowest readings in years, reinforcing the view that inflation is converging sustainably toward the 2% target. The April 2025 removal of the consumer carbon tax has also contributed to weaker energy readings, though gasoline prices have spiked dramatically since the start of March, threatening to reverse that dynamic and complicate the Bank of Canada’s path forward.