Inflation slows ahead of Bank of Canadas 1st rate decision of 2025 – National [Video]

December’s inflation data offered a mixed bag to the Bank of Canada as it gears up for its first interest rate decision of 2025 with U.S. President Donald Trump’s tariff threats still looming over the Canadian economy.

Statistics Canada said Tuesday that the annual pace of inflation cooled to 1.8 per cent last month, down one-tenth of a percentage point from November.

The agency pointed to Ottawa’s GST/HST “holiday,” which began Dec. 14, as the main factor pulling price pressures down. Roughly 10 per cent of StatCan’s representative basket of consumer goods is included in the federal tax break, which includes many grocery items, restaurant meals, alcoholic beverages and children’s toys and clothing.

Excluding food, the consumer price index rose at a pace of 2.1 per cent, StatCan said.

The impact of the tax holiday is expected to be even more pronounced in the January inflation data, which will capture a full-month of price reductions.

The Bank of …