The annual inflation rate in Canada dropped to 2.3% in March 2025, down from 2.6% in February — surprising many who expected it to hold steady. This marks a key step in the Bank of Canada's plan to normalize inflation after temporary GST/HST breaks ended last month.

What’s Driving the Drop?

Gas prices reversed course with a -1.6% dip (vs +5.1% in Feb), thanks to falling crude oil prices after OPEC+ announced increased output.

Transportation inflation slowed to 1.2% (from 3%).

Cell phone plans got cheaper too — down a steep 8.8%!

But not all prices are falling: With the tax breaks gone, food prices surged to 3.2% (up from 1.3%), especially in restaurants.

Overall, prices ticked up just 0.3% from February — a sign that inflation pressures may be easing.

Source: Statistics Canada