Canada Inflation Research Brief

Inflation eased despite the end of tax holiday. Inflation unexpectedly moderated 30 basis points to 2.3 per cent in March, as lower travel and gasoline prices more than offset the bounce back after the end of the GST/HST tax holiday. Gasoline prices have largely been falling due to tariffs threatening global demand, while travel costs are normalizing after a spike in February. Nevertheless, when looking at the central bank’s preferred measures of core inflation – CPI-median and CPI-trim – they also showed their first in-range reading since September. That said, these core measures are still at an elevated average rate of 2.9 per cent. The three-month annualized pace of those averaged core measures is also holding high at 2.7 per cent.