March 20, 2025
SUMMARY
As the GST tax holiday came to an end, Ontario’s headline inflation jumped a full percentage point from 1.7% y/y in January to 2.7% y/y in February, with a similar increase when excluding food and energy. While energy inflation cooled a bit compared to before, food inflation reversed course. Both goods and services inflation were up. Despite the sudden heating up (which will likely show in the March data as well), we can expect inflation to fall again once the carbon tax is axed in April.
CONSUMER PRICE INDEX INFLATION
Ontario’s headline inflation spiked to 2.7% y/y in February from 1.7% y/y in January, with a similar increase in inflation excluding food and energy (2.1% to 3.2%). Energy inflation moderated slightly, down to 2.6% from 5%, while food reversed from -1.8% to 0.8%. More noteworthy was that both goods and services increased as the GST tax holiday ended in February. Goods inflation was back to the same reading from a year ago at 1.4% (up from near flat readings in the last few months of 2024). Services inflation was up almost an entire point, from 2.6% to 3.7%, ending the trend of lower readings seen since summer 2024. Rent inflation remained at elevated levels, albeit overall shelter inflation was at a slower pace compared to January 2024 (4% vs 5.2%), partially attributed to the falling interest rates. At the city level, Toronto mirrored the movement in the province-wide inflation, rising from 1.9% to 2.8%.
Note: Inflation excluding food and energy, a measure of “core” inflation, is often of interest since food and energy prices tend to be volatile and may not represent average underlying prices trends.
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FOR MORE INFORMATION, CONTACT:
Ali Ahmad
Research Analyst
Ontario Construction Secretariat (OCS)
180 Attwell Drive, Suite 360, Toronto, ON M9W 6A9
P 416.620.5210 ext. 222
aahmad@iciconstruction.com
